Up to 200x

based Leveraged Liquidity Provision dApp

Alfprotocol team

Matas Sauciunas

Chief Executive Officer

Jokubas Zakarauskas

Chief Technology Officer

Ugne Kereisyte

Head of Marketing

Artsiom Misjukevich

Growth Manager

Mantas Grubliauskas

Head Of Comunication

There are four sources of yield in Alf:

Interest rate paid by the borrowers who need short-term access to liquidity (this notion also includes arbitrageurs and other users of the flash loan functionality).
Leveraged protocol profit fee on auto-compounded yield rewards
Trading fees from AlfMM, the internal AMM DEX solution.
And token incentives nominated in the platform token (ALF), paid to incentivize liquidity provision in certain pools.

All of the components are fairly standard and represent well-known primitives:

  • Liquidity pools
  • Lending module
  • Constant-product AMM
  • DAO contracts

The future-proof flexibility is achieved by uncoupling the key components through standardized interfaces that allow enabling and disabling modules at discretion of the team and, later, the protocol DAO.

Feature
Alfa Homora
Raydium
Sunny
Alf
Leveraged yield farming positions
Up to 9x without platform token staking
No
No
Up to 200x leverage (if liquidity is sufficient)
Yield optimization
No
No
W/o leverage
Yes
Access to Solana liquidity
No
W/o leverage
W/o leverage
Yes
Multi-asset collateral
Partially compatible
N/A
N/A
Yes
Flash loan revenue for LPs
Yes
No
No
Yes

The basic risk framework of leveraged liquidity provision on AMMs is between trading volume (the amount of capital traded through the AMM pair within a time frame) and price movements (the maximal difference between quote prices on a given pair within a time frame).

Constant-product AMMs suffer from what is called impermanent loss,— a loss that liquidity providers make when the quote price diverges from the one when they entered their position. When prices diverge, impermanent loss starts to accrue, which is amplified with leverage for a leveraged position, until the position is exited, de-leveraged, or liquidated.

Another solution (offered by Alf) would be to shift the borrowed capital into other types of positions when the market is moving, or automatically exit the position before a loss can grow out of proportion. This is maintained through oracle connections (to monitor prices on external markets and compare them with the AMM prices) and a flexible pool of alternative strategies that the risk-seeking investors can subscribe to.

For select position types, Alf enables additional collateralization of leveraged positions with assets that are not entered into the position itself.

To provide margin, Alf borrows either LP tokens, or underlyings, of the targeted positions, primarily using its own internal liquidity pools (built by AlfMM and the lending solution). But in addition, Alf can tap into external liquidity of overcollateralized lending solutions (such as Solaris), offering the users to provide collateral in additional assets (that are used to collateralize these external borrowing positions).

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