Top Things You Should Know About Alpha Finance (ALPHA)

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22 Mar 2024

Hey guys, I’m back with another comprehensive Q&A piece, this time for the cross-chain DeFi platform driving DeFi into the next stage of innovation – Alpha Finance (ALPHA).
Alpha Finance is an ambitious DeFi platform with developers backed by VC that are right now, building innovative DeFi products to maximize yield for users. Alpha’s DeFi products maximize yield for users, address market gaps, solve problems, and onboard the general population to DeFi.
Now, before we dive in, the following piece is similar to my latest articles on Perpetual Protocol (PERP), 1inch (1INCH), and BadgerDAO (BADGER), so if you haven’t already seen those, be sure to check them out as well.
Hope you enjoy!
The list of Q&A is kind of long so first comes the list of questions that I have prepared the answers to:

What is Alpha Finance?
Who and When Created Alpha Finance?
What is $ALPHA Token Used For?
What is Alpha Homora?
What is ibETH
Where does the High APY Come From?
Where to Store $ALPHA?
Where to Buy & Sell $ALPHA?

1. What is Alpha Finance?

Alpha Finance website homepage

Alpha Finance, ‘Alpha’ for short, is a cross-chain DeFi platform building interoperable, high-yielding DeFi products on Ethereum and the Binance Smart Chain (BSC).
With the aim to be cross-chain compatible, not only can digital assets in the Ethereum ecosystem flow into Alpha DeFi products, but digital assets held on Binance’s centralized exchange can easily flow to DeFi products built on BSC as well. This brings a seamless flow of digital assets across not only different blockchains but the largest centralized exchange as well.
As such, Alpha Finance’s interoperability is ultimately meant to onboard and accommodate a wider audience to DeFi.
What’s more?
Alpha’s ecosystem of DeFi products focuses on capturing unaddressed demand in DeFi in an innovative and user friendly way. Each Alpha product is focused on solving problems and addressing market gaps in the sector the product is in.
Currently, Alpha’s DeFi products are built on Ethereum and are focused on maximizing yield through high APYs made possible with leverage and automatic compounding. Also, all Alpha products will interoperate with one another like DeFi legos to maximize returns for users while offering solutions to minimize downside exposure/risk.

2. Who and When Created Alpha Finance?

Alpha Finance founder Tascha Punyaneramitdee

Alpha Finance was founded by Tascha Punyaneramitdee and launched in July 2020 following a public token sale on the Binance Launchpad.
Tascha currently serves as the Project Lead at Alpha Finance and will remain in this role until the project is sufficiently decentralized.
Prior to Alpha, Tascha started a career in Investment Banking at Jefferies in San Francisco and then in London. She later pivoted to join Tencent in Thailand as a Product Manager and then entered the blockchain space with her role as the Head of Strategy at Band Protocol.
Joining Tascha in her leading role at Alpha Finance is Nipun Pitimanaaree who serves as Alpha’s Lead Blockchain Engineer.
Nipun is a highly educated individual with an MA in Electrical Engineering and Computer Science and a BA in Mathematics and Computer Science from MIT. Also, he is currently ranked 3rd in the International Mathematical Olympiad hall-of-fame (global ranking). Prior to Alpha Finance, Nipun was well-known for developing multiple successful automated stock and crypto trading algorithms and for his role as the Chief Research Officer at OZT Robotics.
In addition to Tascha and Nipun as the project’s leaders, Alpha Finance has a team of at least 7 members according to their official Linkedin page.

3. What is $ALPHA Token Used For?

Alpha Finance’s $ALPHA token logo

The native cryptocurrency of the Alpha Finance ecosystem of products and protocols is $ALPHA – an ERC-20 and BSC compatible token.
$ALPHA tokens are primarily used as a governance and utility token for Alpha Finance products including the Alpha Homora protocol and future Alpha products. Many of the utilities possible with $ALPHA have not yet been implemented and Alpha Finance is learning from the most successful projects in the DeFi space, such as Uniswap, Compound, and AAVE.

$ALPHA Token Use Cases:

Governance - Product-level and Alpha Finance-level voting rights
Utility - Staking, fee discounts, rewards, and various incentivization mechanisms

Governance
Alpha Finance implements a 2-level governance structure: product-level and Alpha Finance-level.
The product-level governance allows $ALPHA token holders to govern various metrics specific to each Alpha product.
Alpha Finance-level governance allows $ALPHA token holders to vote on how Alpha’s ecosystem of products interoperates.
Utility (not yet implemented)
$ALPHA will be used as a utility/work/interoperability token for a wide variety of use cases across Alpha DeFi products. Some of these use cases include, but are not limited to:

Providing Alpha products with liquidity
Staking to receive a percentage of protocol fees
Providing exclusive access to more functionalities on Alpha products
Serving as the main interoperability token to leverage Alpha products interoperability

All in all, the $ALPHA token will play a significant role in using, earning, and governing the growing ecosystem of Alpha Finance DeFi products. And as the ecosystem grows, so will the usage and demand for $ALPHA.

4. What is Alpha Homora?

Alpha Homora interface (source)

Alpha Homora in an Ethereum-based DeFi protocol for leveraging your position in yield farming pools.
As if yield farming wasn’t risky enough, right?
Anyways, with Alpha Homora, Alpha Finance is staying true to its ethos of providing innovative products that solve problems and fill market gaps.
That’s why Alpha Homora is the first leveraged yield farming and leveraged liquidity providing protocol to launch on Ethereum mainnet.
For the first time ever, DeFi degens everywhere can earn even higher yields than what’s currently possible by taking on leveraged positions on yield farming.
Not only that, but ETH lenders can also earn high interest on their ETH. This is because leveraged yield farmers/liquidity providers borrow ETH to yield farm/provide liquidity and must pay a higher than normal interest rate for doing so.
Therefore, by introducing leverage into yield farming, yield farmers can earn higher farming APY and trading fees APY from taking on leveraged yield farming positions, and then the ETH lenders also benefit from high interest on their ETH.

How is Alpha Homora Different?

Alpha Homora features High APYs for Yielding Farming

First of all, Alpha Homora has introduced leverage to yield farming. This has never been done before and has thus unlocked many unique use cases that cannot be found anywhere else in DeFi.
You can use Alpha Homora in the following ways

Yield farm with leverage (Only on Homora)
Yield farm normally, without leverage
Provide liquidity with leverage (Only on Homora)
Provide liquidity normally, without leverage
Lend ETH to generate the highest lending APY on ETH (Only on Homora)

Moreover, Alpha Homora’s automated yield farming protocol has unique features, such as loss-minimizing/gas-saving features, optimal swap functionality, and automatic reinvestment functionality.
That said, whether you want to yield farm with leverage or not, Alpha Homora offers a variety of innovative and user-friendly options and features that are different from competing protocols.

5. What is ibETH

ibETH is an interest bearing derivative of ETH. When users deposit ETH into Alpha Homora Bank, they receive a proportional amount of ibETH token. ibETH can be traded on the open market and is an interest bearing asset that represents shares of ETH in the Homora Bank pool.
When users borrow ETH on Alpha Homora, they pay interest which is distributed to ETH lenders in the form of ibETH, proportionate to the amount of ETH they lend.
The interest borrowers pay is based on a triple-slope interest rate curve, based on ETH utilization:

At 0-50% utilization rate, borrow interest rate will be fixed at 10%
At 50-95% utilization rate, borrow interest rate goes up linearly to 25%
At 95-100% utilization rate, borrow interest rate goes up linearly to 100%

Also, 10% of borrower's interest is stored in the Alpha Homora Bank reserves and can be used as an insurance fund to bail out lenders in the case of an unexpected scenario.

6. Where does the High APY Come From?

Alpha Homora TVL since inception (Source)

As seen in the chart above, the total value locked (TVL) in Alpha Homora has been growing exponentially since inception and is now valued at nearly $500M USD.
Why is that? How does Alpha Homora grow its TVL so fast?
I’ll tell you why.
Alpha Homora features high APYs and high APYs are a magnet for liquidity.
But where do these high APYs come from?
Alpha Homora manages to deliver some of the highest APYs in the industry through the following methods and techniques:
Compounding
All farmed $ALPHA tokens are reinvested and compounded every day to produce higher APYs. The compounding produces a higher profit potential in a completely passive manner.

“Compound interest is the 8th wonder of the world. He who understands it, earns it; he who doesn’t, pays it.” - Albert Einstein

Leverage
All pools under the Yield Farming Pools section support more than 1x leverage + trading fees APY on leverage. The more leverage you use, the higher the APYs can get.
All pools on the Liquidity Providing section that support more than 1x leverage return a high APY from that comes from trading fees APY on leverage.
Trading Volume Mining
If you have ALPHA and/or (ETH or ibETH) and use it to provide liquidity to ibETH/ALPHA pool through Alpha Homora or directly on Uniswap you can earn $ALPHA tokens and high trading fees APY.

7. Where to Store $ALPHA?

MetaMask wallet website homepage

Alpha Finance (ALPHA) can be stored as an ERC-20 token in any Ethereum-based wallet or as a BEP-20 token in any Binance Smart Chain (BSC) supported wallet.
When handling ALPHA, you must be aware of which token you have so that you send it to the right address and store it in the right wallet.
The best wallets for storing ALPHA are non-custodial Web3 wallets that provide seamless access to the best DeFi applications like Alpha Homora, 1inch Exchange, Uniswap, etc.
That said, since Ethereum has the largest DeFi ecosystem, it’s recommended to use the ERC-20 version of $ALPHA as it’s fully supported in the Ethereum-DeFi ecosystem.

Popular $ALPHA Wallets (ERC-20) :

Trust Wallet (mobile)
Argent (mobile)
Coinbase Wallet (mobile)
MyEtherWallet (MEW) (web)
Metamask (web)

Popular $ALPHA Wallets (BEP-20) :

Metamask (mobile)
Trust Wallet (mobile)
Enjin Wallet (mobile)
Guarda Wallet (web, desktop, mobile)
Atomic Wallet (desktop)

In addition to the above-listed wallets, Alpha Finance (ALPHA) can be stored on a wide variety of other reputable wallets supporting ERC-20 tokens as well as BEP-20 tokens.

8. Where to Buy & Sell $ALPHA?

Alpha Finance (ALPHA) can be bought and sold on a peer-to-peer (P2P) basis but the most popular way to buy, sell, or trade $ALPHA is through centralized and decentralized cryptocurrency exchanges.
You can buy and sell ALPHA with cryptocurrency or fiat currency at the following top DEXes and exchanges. In most cases, you will be able to buy ALPHA with ETH or stablecoins.

Uniswap - ibETH
Binance - BTC, USDT, BUSD, BNB
Hotbit - BTC, ETH, USDT
Coinone - KRW
Bilaxy - USDT

In addition to the exchanges listed above, Alpha Finance (ALPHA) is also traded on a variety of other exchanges and platforms that enable people to buy, sell, or trade cryptocurrencies.
Hope you enjoyed this article, Let me know if I have missed something in the comments.
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