Alfprotocol – the all-in-one solution for all DeFi services. Learn more about the objectives and features of the protocol.
Alfprotocol is a protocol for capital deployment on Solana for the purposes of liquidity provision and yield farming, both with and without margin of up to 200x. The protocol introduces its own versions of an invariant-based Automated Market Maker protocol for exchange operations and a money market for short-term loans. The central contribution to the Solana ecosystem is a protocol for leveraged LP positions in AMM pools and yield farming protocols.
Alf improves capital efficiency and facilitates more liquid markets by connecting low-risk, low-effort investors providing liquidity to lending protocols with risk seeking, active management investors who focus on leveraged liquidity provision and yield farming positions.
We’re happy in DeFi news to tell you about this protocol that represents a step towards the third generation of DeFI, providing leverage to liquidity providers in MAs on the Solana blockchain.
AlfProtocol, Executive Summary
One of the central innovations introduced by decentralized finance (DeFi) is fully automated money markets with low trust requirements, accessible by arbitrary parties.
Capital deployment into collateralized debt products or automated non-custodial market making (AMM) is becoming streamlined, with lowest historical barriers for entry, both in the sense of compliance and minimal viable investment amounts. The established industry term for this group of mechanisms is liquidity provision (LP).
Second generation of DeFi brought forth two further innovations:
• Token incentives for liquidity provision (“yield farming”), and
• Margin trading and leveraged positions.
Alf protocol comprises several modules that will work together to provide users with a complete intermediary product that will facilitate liquidity provisions.
The treasury is one of the core modules that will handle collateral and the tracking of leveraged positions. It is the basis of all user interactions with the leverage protocol and will be responsible for any borrowed funds on behalf of users. The treasury module will not handle any position initiation or liquidation; the liquidation of unhealthy positions will therefore be the responsibility of the second module, which is the auction module that will get triggered by the treasury.
ALF is a fungible SPL token used by Alf protocol. The initial supply is 10,000,000,000 ALF tokens that will be distributed at launch.
ALF token is the centerpiece of the protocol incentive structure and value extraction mechanism. It has number of functions:
- Staking in the DAO module to decide on:
- DAO Treasury utilization (funding development, incentive programs, grants, buyback & burn events);
- Module onboarding (enabling leveraged capital deployment into new protocols);
- Parameter adjustment (fees, leverage, maintenance margin);
- Yield farming rewards for:
- Incentivized pools in ALF lending market
- Alf leverage Protocol users
- Incentives for prospective lender protocols;
- Partnership farming programs;
- Alf convertible note buyers
- Leverage tiers:
Stake ALF to get access to higher leverage in a tiered system.