ALFPROTOCOL: A Solana Based Leveraged Yield Farming
23 November 2021 - 02:00PM
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One Of The Many Case Uses Of Solana’s Alfprotocol Alfprotocol is
created to cater to traders with different appetites for risk
aversion. In essence, it provides leveraged and non-leveraged
products that would suit both new and experienced traders in a
decentralized ecosystem that is powered by Solana, a robust
blockchain suitable to handle the core requirements of a
decentralized finance platform. Solana has proven itself to be a
viable go-to blockchain compared to Ethereum and other L1 solutions
that have many shortcomings when tested with substantial user
traffic. Unleveraged Liquidity Pools Solana’s Alfprotocol offers
two main packaged products for the unleveraged pools in the form
of: AlfMM – an on-chain autonomous market maker (AMM) decentralized
exchange (DEX) service capable of reallocating unused liquidity to
the leverage protocol. AlfMM will utilize AMM side order execution
to achieve a bidirectional integration between AMM and the
Treasury. The AMM acts as a source for the order flow and breaks
down operations to acquire the best price option between the AMM
and Serum, which gives it a DEX aggregator attribute. AAlf –
Allotment Alf is a money market solution that utilizes single-asset
pools for liquidity providers (LPs) and overcollateralized debt
positions for borrowers. Pools are handled separately, with each
pool’s asset acting as a base for computing pool utilization and
interest rates. The true purpose of these two products is to
provide a platform for risk-averse investors to provide liquidity
and trade, all while indirectly providing liquidity for the
leverage protocol. Leveraged Liquidity Pools Alfprotocol’s leverage
feature is a system that enables traders to enter positions with
leverage using the Solana blockchain. The protocol will utilize its
connectors module, which uses business logic to enter leveraged
positions outside protocol Serum to achieve the highest APY and
efficiency in capital provision. In addition, to ensure sound
liquidation, yet another module called “The Treasury” will
track positions’ health at all times by keeping a tokenized
representation of the collateral and positions debt made in
lockboxes in its custody and being linked with an oracle. Lockboxes
will also be utilized within the leverage protocol by wrapping
fungible tokens. Lockboxes are the core technical solution for
leveraged lp position health and collateral tracking. Alfprotocol’s
users will be able to use multiple lockboxes as collateral for a
single position. Alfprotocol is currently in development. To find
more info about the project and stay updated with the project’s
current progress, please visit the website and check out the
whitepaper.
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