Proposal: List ALPHA as Collateral Asset

For: List ALPHA as collateral

Against: Do nothing

BACKGROUND

Alpha Finance Lab is focused on building an ecosystem of DeFi products that will interoperate to maximize returns while minimizing risks for users. Alpha products focus on capturing unaddressed demand in DeFi in an innovative and user-friendly way.

Key facts:

  • ALPHA is a governance token for Alpha Finance Labs ecosystem and portfolio of products - token holders can vote on the opened proposals for key product metrics.
  • First product from the portfolio is Alpha Homora - a protocol that enables leveraged yield farming. It captured $1 billion of TVL within 4 months since it’s launch in October 2020, bringing Alpha Homora to top 10 of DeFi Pulse (at the time of writing #9) .
  • Upcoming products include AlphaX, a decentralized, non-orderbook perpetual trading platform with tokenized positions and funding rate baked into the price of the asset.

Alpha Finance CEO, Tascha Punyaneramitdee has an extensive worldwide banking background with a vision to reform traditional finance in a decentralized manner. Also former Head of Strategy for Band Protocol. Alpha team commitment is to grow the whole DeFi sector by building innovative products including Alpha Homora v2 that is strategically integrated with CREAM V2 by the first-seen implementation of protocol-to-protocol lending.

MOTIVATION & BENEFITS

ALPHA is not listed as collateral on any platforms so far, yet it’s liquidity pools with ETH tend to be highlighted as trending on many AMM’s. By outstanding achievements, Alpha attracted the attention of the whole DeFi space including the recent announcement of Delphi Digital investing in the project. Other investors include The Spartan Group, Multicoin Capital, DeFiance Capital.

Benefits for CREAM:

  • Increased TVL for Cream: Listing ALPHA token as the primary place would bring a flow of TVL in form of Alpha tokens as collateral to borrow against it (current market cap according to CoinGecko is $558m)
  • Increased brand-awareness: Alpha Team is already collaborating with CREAM, borrowing liquidity for it’s leveraged positions in Alpha Homora v2. Listing Alpha as collateral would cause a stream of marketing activities that will bring new users to CREAM - 6000 members of Telegram Group and 33k of twitter followers.
  • Access to Alpha token holders: 7500 holders + over 20k users participated Binance Launchpad

TOKEN

  • Symbol: ALPHA
  • Blockchain Type: ERC20, BEP20
  • Role of Token: Utility

EXCHANGES

ALPHA is listed on a number of popular exchanges (https://www.coingecko.com/en/coins/alpha-finance#markets) including Binance (margin enabled, futures enabled).

Daily trading volume averages to $7.22 billion over the last 3 months according to CoinGecko (https://www.coingecko.com/en/coins/alpha-finance/historical_data/usd?end_date=2021-02-06&start_date=2020-11-06#panel).

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Since I faced some limitation in links per post, let me continue with few replies including valuable links:

AUDITS

Alpha Homora V2 is audited by Peckshield and Quantstamp: https://github.com/AlphaFinanceLab/homora-v2/blob/master/audits/Alpha-Homora-v2-Peckshield-audit-report.pdf

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LINKS

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Alpha Homora is a user of CREAM’s Iron Bank so my sense is adding Alpha as a new collateral type brings relatively low incremental risk and would help strengthen the collaboration between both protocols. I’m definitely for it.

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I think that this would be a good idea in terms of value capture.

Right now, the ALPHA token doesn’t have much utility beyond a speculative asset. In the near future, Alpha Finance Lab will release their tokenomics for ALPHA, but as of right now, there are many ALPHA holders who have either bought ALPHA outright or have earned ALPHA through leveraged yield farming or by providing liquidity to the ibETH/ALPHA pool (when rewards were active for that LP).

Listing ALPHA as a collateral asset will enable ALPHA holders to use their ALPHA as collateral and borrow from Cream, which benefits our platform. When the tokenomics are released in the future, ALPHA could be a draw for users who want to borrow ALPHA for arbitrage, staking rewards, etc. That is a speculative point, but their could be a sizeable market for lending ALPHA sometime later this year.

Cream would strengthen the partnership that we have with Alpha Finance Lab and benefit from shared marketing. Seeing as ALPHA is relevant for BSC borrowers, there is additional value capture from that chain and any inter-blockchain operability that comes along with the Stargate release on Cosmos later this month.

I would be in favor of adding ALPHA as a collateral asset for Cream, but I do want to disclose that I hold ALPHA. Would like to see others share their thoughts, too.

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