Alpha Finance
By Bitazza Team
Silicon Valley has long been a cradle for innovation, incubating world-class companies like Google, Amazon, Facebook, and Apple. However, with the permissionless and open nature of blockchain technology, entrepreneurs have been able to create impactful projects without being in Silicon Valley and relying on venture capital funding. In this series, we look into a Decentralized Finance (DeFi) aggregator protocol from Thailand called Alpha Finance Lab. Alpha’s vision is to reform and create a complete DeFi ecosystem where it can interoperate to maximize returns by offering a wide range of solutions from minimal to high risk. Instead of building one DeFi product like most teams do, Alpha Finance Lab focuses on meeting fast-moving market demands by implementing fast product cycles and iterations. Today, Alpha Finance Lab has three distinct products ranging from leveraged yield farming to incubating new crypto projects.
Alpha Finance was co-founded in September 2020 by Tascha Punyaneramitdee. She graduated from UC Berkeley with a bachelor’s degree in Economics and has worked in three different industries: Head of Strategy at Band Protocol, Product Manager at Tencent, and Investment Banking at Jefferies. Tascha mentioned that DeFi is one of the financial groundbreaking innovations and can truly change financial services at the protocol level. Alpha is now globally recognized and has grown a lot since its launch, doubling in headcount since its launch and is heading for a more decentralized and diverse team to attract more international developers. The network’s Total Value Locked (TVL) peaked at US$1.4 billion according to Defillama. Alpha Finance Lab has raised a total of US$1.67 million from well-known investors including Defiance Capital, Multicoin Capital, Spartan Group, Delphi Digital and recently partnered with SCB 10X.
Currently ALPHA, Alpha Finance native token, is trading at $1.16 making over 350% since the last correction in the summer. ALPHA is built to be an essential and coherent ecosystem in the Alpha universe. The token can be staked so users can earn protocol fees from Alpha’s entire product suite, earn tokens of incubated projects from Alpha Launchpad incubator program, and also unlock product specific benefits. As Alpha products earn fees, 75% of the total fees will be distributed to all ALPHA stakes in the form of ALPHA tokens. One such product, Alpha Homora, accumulated a total of US$5.5 million in fees. When Alpha Finance moves its governance structure to a Decentralized Autonomous Organization (DAO), the ALPHA token will be central to the governance process and subsequent upgrades to the protocol.
Alpha Homora
Alpha Homora is a Decentralized Application (DApp) built by Alpha Finance Lab giving a lending/borrowing protocol to Alpha’s ecosystem. The huge market gap in the Ethereum DeFi space was that at the height of the yield farming craze, users could earn outsized yield on various platforms and tokens but there was no way to earn a high yield on ETH, the native token of Ethereum which powers most DeFi protocols at the time. Alpha Homora addresses the lending/borrowing issue and enables leverage yield farming for its users, allowing them to offer the most attractive yield on ETH in the market. Alpha Homora V1 is interoperable with Ethereum and Binance Smart Chain (BSC) giving clients up to 2.5x leverage. To put into simpler terms, lenders may leverage their liquidity on an automated contract and lend 2.5x the position, earning even more than they normally would. Alpha Homora V2 expanded further into other assets interoperable with Curve, Balancer, SushiSwap, and Uniswap giving specific assets up to 9x leveraging position.
AlphaX
AlphaX is an upcoming DApp built by Alpha Finance Lab. AlphaX will allow professional and sophisticated traders to hedge their positions using perpetual swaps. AlphaX was inspired by a realization that Alpha Homora users who perform leveraged farming are inherently short ETH and lenders are long ETH. Since yields are affected by price volatility of ETH, there is fundamentally a demand for ETH hedging. At the time of writing (16 August 2021), the perpetual swap and derivatives market daily trading volume is $171 billion. This lucrative market has not yet been dominated by any single project, so Alpha Finance could stand to capture a significant market share. Currently, AlphaX is on an open beta-testnet.
Alpha Launchpad
Alpha Launchpad is a DeFi incubator program that allows further decentralization to Alpha’s ecosystem besides the Alpha team being the only developer in Alpha’s ecosystem. Developers will be incentivized by hands-on support directly by Alpha team, business modelling, tokenomics design, and fundraising. Moreover, token launch PR and marketing will be supported by Alpha giving project exposure. Alpha Launchpad greatly benefits ALPHA holders as they will be airdrop incubated projects token and shares of transaction fees on the project. The first project to be incubated is called Beta Finance and users who stake their ALPHA tokens will be able to exclusively claim BETA tokens before others.
Alpha Finance Lab’s innovative approach in creating a suite of products that serve immediate market demands instead of a single product like others is certainly unorthodox. Its technology has been used by crypto natives and garnered interest from financial institutions. As more projects graduate from the LaunchPad, Alpha Finance Lab is at the center of deal flows and should be able to be at the forefront of innovation and attract more builders to its ecosystem. The team is often seen as the fastest horse in the race as they are able to spot market opportunities and quickly develop products to serve those needs. Speed is indeed one of their greatest strengths and we are excited to see what Alpha Finance Lab has to offer in the coming months.
Materials on Bitazza Content Hub are intended to be used and must be used for informational purposes only. The views, information, or opinions expressed are solely those of the individuals involved and do not necessarily represent those of Bitazza and its employees.
The website and the information contained herein is not intended to be a source of advice or financial analysis with respect to the material presented, and the information and/or documents contained in this website do not constitute investment advice.
Sources
https://alphafinancelab.gitbook.io/alpha-finance-lab/
https://alphafinancelab.gitbook.io/alpha-homora-v2/tbd-overview-of-alpha-homora-v2-dapp
https://blog.alphafinance.io/alpha-tokenomics-fee-accrual-in-the-alpha-ecosystem/
https://blog.alphafinance.io/inside-alphax/
https://research.binance.com/en/projects/alpha-finance-lab
https://defillama.com/protocol/alpha-finance
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