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Alpha is more than 61.8% more likely to become the top three loan platform in DeFi and the unicorn of derivatives on the chain.
Written by: NGC Ventures Managing Director Kay Feng
Special thanks to Shen Lei (Jackson) for his contribution to this article.
Disclaimer: The ALPHA token price has risen sharply compared to the historical low. The author of this article also holds a position in ALPHA. This article does not apply to investment advice.
If you think AlphaFinanceLab = Alpha Homora, it is almost equivalent to thinking that Adobe Photoshop is the only product of Adobe. Alpha Homora appears to be a leveraged income farming aggregator, but in essence it is a loan platform that pretends to be an income farming aggregator, and its borrowing amount currently exceeds Aave V2. After the launch of Alpha Homora V2 (support more assets, including USDT, USDC, DAI even market-making credentials [LP token]) February 1, Alpha Homora borrowing total value of TVL locking is likely to exceed Aave V1 + V2, among the press The top three DeFi loan agreements (Maker, Compound and Alpha) calculated by TVL.
If Alpha Homora intends to become a real C2C lending platform now, it only needs to make simple modifications to the front end of its website and smart contracts.
Alpha is different from the typical forked free-rider “Sushi Paradigm” in the DeFi field. The latter attracts a large number of arbitrageurs through liquidity mining and cannot gain user loyalty in the short term (although Sushiswap succeeded a few months later , But it is absolutely an exception in a series of “community fork” examples. And most users use Alpha Homora because they really need to use their market-making certificates, or use ETH to earn interest.
In addition to Alpha Homora, Alpha has two other products: AlphaX and Alpha Asgardian , which focus on perpetual contracts and options respectively. AlphaX will be launched on the mainnet in the first quarter of this year, and has not yet been evaluated.
If there is no fatal security incident similar to the COVER protocol, I personally think that in 2021, Alpha is more than 61.8% likely to become the top three DeFi lending platform and the unicorn of derivatives on the chain (golden section) (笑脸.jpg)
Homora: The Trojan Horse that Raided Aave
Let’s start with some unrelated articles: Aave seems to be the unshakable leader in the DeFi loan platform, but Degen veterans still remember the era when Aave was called ETHLend in the past, when it was a lonely and unpopular child. . After introducing features such as lightning loans and striving to comply with regulations, it gradually ranks among the top three DeFi loan agreements and is now one of the potential grayscale trust fund products.
Sushi is also one of the most outstanding recent agreements. KOLs of opinion leaders often compare it with Uniswap through many indicators. As we all know, its transaction volume has reached the same order of magnitude as Uniswap. Nevertheless, the number of Uniswap users is still far away. Therefore, many people on Cryptoticker still think that Sushiswap is a kind of whale game. In this game, people like DeFi giant whale SBF may beautify the platform data in some way (such as the traditional technique of manipulating penny stocks) while pulling High currency prices.
Aave is awesome, but similar to Uniswap, it is not complete.
Alpha may have some characteristics similar to Sushiswap, but this will not prevent Alpha from taking off.
Olympiad Hall of Fame
Alpha chief engineer Nipun Pitimanaaree ranked fourth in the International Mathematical Olympiad IMO History Hall of Fame. Nipun has played in the International Olympiad five times and won four gold medals. As a reference, the historical record of Terence Tao, another great international Olympian contestant, is only 1 gold, 1 silver, and 1 bronze. Although Tao Zhexuan is the youngest international Olympiad gold medalist in history, he also failed to make the first page of the International Olympiad History Hall of Fame players.
This means that the CTO of the ALPHA project is undoubtedly one of the smartest people on the planet. If calculated on the basis of IQ IQ, it must be more than 150. Just as the Chinese say, the swan bird knows its ambitions, and ordinary people of IQ100 will never understand the ambition of IQ150 genius.
Alpha, the protagonist of this article, is often classified as a revenue aggregator. On this point, many people attributed to Alpha’s TVL has exceeded the yearn agreement.
If you think that the above-mentioned Olympian math genius only wants to make small improvements on the shoulders of another genius Andre Cronje, then it would greatly underestimate the great ambition of the great god of fame.
The author is also an ordinary person of IQ100, he can only understand the simple plot: almost no one realizes that Alpha Homora is a Trojan horse that threatens Aave, which is very different from Sushi’s low liquidity utilization rate:
- If Alpha wants to create a loan product similar to Aave. Alpha does not need to use aTokens for income farming, launching a frontal attack on Aave similar to Sushi.
- In fact, Alpha’s “loan” product has been launched through Alpha Homora, and its capital utilization rate is much higher than that of its competitors.
Alpha is a loan product. Does this make you confused? Let’s start with Alpha Homora’s product design. Let’s say you are farmer Alice:
- Alice has 100 ETH and hopes to cultivate UN through the ETH-USDT fund pool of the Uniswap protocol, usually with a 30% annualized rate of return APY . Usually, she can exchange about half of ETH for USDT, then provide it to the liquidity pool and get 30% APY (for information on how to best implement it, see Alpha’s blog ).
- With Alpha Homora, she can loan 200 ETH from Alpha Homora Bank (need to pay loan interest), plus her original 100 ETH , she can now put ** 300 ETH (3 times leverage!) into income cultivation, The **90% APY obtained based on the original investment amount , triple!
- As long as the value of her position does not fall below 250 ETH, she can continue to farm without increasing deposits.
Note: Alice needs to pay corresponding interest based on the loan amount, depending on the utilization rate of ETH.
If you haven’t figured it out yet, it doesn’t matter. Just remember that Alpha Homora has integrated the debit/credit function. The current version of Homora V1 only supports ETH lending. How much is Homora’s current total lock-up of ETH?
Source: Alpha Homora — Earn
Although this statistic may seem too simplistic, every number is worth paying attention to:
- Deposited 258,000 ETH and issued a total of 225,000 ETH loans
- APY 7.89% (unstable), utilization rate 87.64%
Yes, 230,000 ETH, according to today’s (January 25, 2021) market price, the total loan amount (200,000 ETH) is approximately equivalent to 260 million US dollars. Let’s take a look at the “DeFi Blue Chip” data:
Since DeBank still lists Alpha in the “EARN” category, there is no Alpha related information in the “Total Loan Amount” picture above. According to the earlier data, we can conclude that Alpha Homora has actually surpassed Aave V2 and ranks fourth in this list.
The upcoming Alpha Homora V2 will support lending stablecoins, including USDT, USDC, DAI and even market-making vouchers. Therefore, the total loan amount of Homora V2 is very likely to continue to grow, reaching the order of Aave V1, and even surpass Aave V1 and V2 in the coming months.
Alpha’s total lock-up reached $600 million in just three months, and I was amazed during that period.
Source: DeFi Pulse
Even compared with Maker and Compound, Alpha Homora still has the highest capital utilization rate and APY.
This level of APY is currently even more attractive than ETH 2.0 Staking. Binance ETH 2.0 staking data shows that its APY has fallen to 9.3% and continues to show a downward trend. Although I haven’t back-tested the relevant data, in the past few weeks, every time I open Alpha Homora’s “EARN” page, most of the time the interest rate has remained around 7% to 8%.
This is not an accidental coincidence. Thanks to the genius-level borrowing interest rate model designed by the Austrian Mathematical Hall of Fame God. When the fund utilization rate is within the range of 80%-90%, the interest rate is approximately maintained at 7% to 8%. It is close to a straight rise.
The genius-level parameters and market incentive mechanism design provide users with a more competitive interest rate than other lending platforms, which is roughly equal to the income level of ETH2 staking (but the convenience of deposit and withdrawal of ETH2 staking cannot be compared with Alpha Homora).
At the same time, the mortgage lending platform Cream Finance recently announced that Alpha Homora V2 has become its first batch of partners, which means that many small market value assets on the Cream platform may also be introduced to Alpha Homora. I personally think that this is more like (Meinertzhagen’s Haversack, Meinertzhagen’s Haversack, a British officer. He succeeded in World War I by “accidentally “I lost a package full of false information that helped the United Kingdom successfully capture Gaza.) Alpha needs Cream’s help to activate the small-cap asset lending pool, and will eventually have its own such asset pool in the future.
When it comes to Alpha’s total lock-up of ibETH, we cannot ignore the famous giant whale ** 0xb1 , which has contributed a lot to Alpha’s total lock-up. If you look closely at the address list, you will find that Alpha is one of the most interactive protocols for whales. 0xb1** Deposited a total of 67,000 ETH in Alpha Homora (a few weeks ago, this figure was only 30,000 to 40,000 ETH), which shows that this giant whale recognizes the security of the protocol. In addition * 0xb1 * also invested high assets in Alpha Homora for leveraged income farming.
0xb1 activity on Alpha (DeBank)
Some people may say that if the giant whale accounts for a large proportion of the total locked position, is this a short-term false prosperity? I think this suspicion is absolutely unnecessary. These statements may be correct in the comparison between Sushiswap and Uniswap in September. At that time, there were only zombie users in the Sushiswap agreement, and there were not many real transactions. But the competitiveness of the loan platform is not the number of users, but the total lock-up and depth, just like many people don’t like BitMEX or OKEX exchanges, but unfortunately, if there is no black swan incident, in this field, Matthew The effect is reality.
AlphaX and Asgardian: Hidden derivative unicorns
Many people think that AlphaFinanceLab is equivalent to Alpha Homora, or just another leveraged farming income Degen project forked from Year, which is almost equivalent to thinking that Adobe Photoshop is the only product of Adobe.
After reading the content of the previous article, I must have understood that Alpha is not yet another Yearn fork project, and its real ambition is higher than Aave.
But Alpha actually holds another big killer, AlphaX, and the project is far from when it was estimated.
AlphaX (currently the second round of beta testnet) is an on-chain perpetual contract product similar to DerivaDAO, Perpetual Protocol and Injective Protocol. In addition to the Perpetual Protocol has been launched on the mainnet, other projects are planned to be launched in the first quarter of this year (at that time, it will be the scene of the big show in turn). Compared with the market value of these projects, Alpha will not be much higher. In fact, before this week, almost no users of Cryptoticker platform mentioned AlphaX-related products, which can be regarded as a signal that it is too early to be evaluated.
Alpha Homora (Leveraged Farming Income) is only Alpha’s first product. Homora may be very similar to Adobe’s early products, and we are far from seeing the shadow of its flagship product Photoshop.
AlphaX is a decentralized, perpetual contract trading market without an order book. Similar to Perpetual Protocol’s vAMM, it is an improved version of automatic market maker AMM, which is different from Uniswap’s traditional x*y=k function mode.
AlphaX testnet Twitter user @YieldFarmerJoe has posted an excellent complete comment on AlphaX. As the saying goes, don’t “new wine in old bottles”. The following content mainly comes from his recent Twitter remarks.
Decentralized (the user holds the key), no non-order book (no interaction with the buyer when selling, and vice versa) trading market.
Simply put, unlike other futures (put and call options) that have a settlement date, perpetual contracts (as the name suggests) exist forever. So they are very much like buying spot . But the buyer does not hold the underlying token assets.
Perpetual contracts and underlying assets are permanently anchored through funding rates. From time to time, the long/short side of the transaction pays a premium to the other party (the party with lower popularity) (further away from the spot price) in order to incentivize the party with lower popularity to increase popularity.
Therefore, if you are on the dominant side, if you stay longer, or your side is more popular, you will have to pay a lot of money.
The first unique selling point of AlphaX:
It doesn’t matter how long you hold it-even if you are on the more popular side-there is no funding rate.
Instead, it is included in the buying and selling prices. So the timing of your trading is very important. The premium or discount of the buying or selling price provides an incentive/blocking factor to bring the price closer to the spot price of the asset.
This can simplify a lot of work and reduce a lot of spot storage work. You only need to pay attention to the timing of buying and selling, instead of paying attention to the rise and fall of fees every 8 hours or every day (or when the funds are settled on your exchange).
The second advantage of AlphaX, and I believe the more exciting one is: the perpetual contract token is turned into an ERC-20 token. You don’t need to open it on AlphaX. After anyone has operated it, they can trade on any secondary market (Uniswap / Sushiswap).
Therefore, you can hold a leveraged perpetual token of a token without worrying about or considering the funding rate and trade-in on the highly popular decentralized exchange DEX, just check its current price to make a decision. Imagine the easy purchase of BTC leveraged contract tokens on the uniswap protocol.
Remember, because it is different from the spot, it increases the risk, when the price reaches a point, it will cause the token to be liquidated and become worthless.
The clearing price is clearly written in the token name, the higher the leverage you choose, the closer it is to the current spot price.
Because AlphaX’s products will use Ethereum’s currency Lego blocks, which will attract more users.
You do not need to register to log in to AlphaX or Perpetual Protocol or Injective protocol. The potential market size TAM or demand of the products covered in the DEX market size.
From the product prototype, it seems that users can customize the options. Connecting to the wallet can reduce the impermanent loss of the tokens provided by the liquidity provider LP in the fund pool. Just click MAX and its user interface UI Very elegant.
( Note: Alpha Asgardian is not on the official roadmap or website of Alpha Finance Lab, it may be similar to an internal hackathon. Therefore, there is still a long way to go before release. )
What should come will come.