The central value loop in Alf is between risk-averse investors (providing the bulk of capital into the “safe” capital deployment strategies) and risk-seeking investors (borrowing capital to enter higher risk leveraged yield farming positions).

To that effect, protocol pools accept liquidity to utilize in the baseline protocols (lending solution and AMM solution). The unused liquidity is utilized in the leveraged position module that connects to external protocols.

Strategy w/ Alf
Risk-averse investors
Principal-protected yield (can be low)
Provide capital into the AMM pools
Risk-seeking investors
Maximize yield (by taking risks)
Provide liquidity into (external) AMMs with leverage borrowed from Alf
Collateral in excess
Access to liquidity
Borrow from the lending pools
Solana traders (incl. on Serum exchange)
Working capital
Don’t know about Alf
Automation skills, short-term capital access
Earn by facilitating market efficiency
Perform liquidations
Protocol team
Development capability
Maximize TVL, monetize protocol usage
Develop the protocol

Alf also taps into other stakeholder groups and the wider economics of Solana ecosystem: it provides strategies for arbitrageurs (to liquidate leveraged positions if they receive a margin call) and facilitates trading on Solana DEXes by providing liquidity, both through its own internal solution (AlfMM) and as leveraged LP in the protocols Alf supports.

The relationship between the stakeholder groups is illustrated below:

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