CoinGecko Podcast - Bitcoin & Cryptocurrency Insights

Tascha Punyaneramitdee, Project Lead at Alpha Finance Explains Alpha Homora V2, Alpha Token, and More – Ep. 23

December 17, 2020 Bobby Ong Season 1 Episode 23
CoinGecko Podcast - Bitcoin & Cryptocurrency Insights
Tascha Punyaneramitdee, Project Lead at Alpha Finance Explains Alpha Homora V2, Alpha Token, and More – Ep. 23
Chapters
CoinGecko Podcast - Bitcoin & Cryptocurrency Insights
Tascha Punyaneramitdee, Project Lead at Alpha Finance Explains Alpha Homora V2, Alpha Token, and More – Ep. 23
Dec 17, 2020 Season 1 Episode 23
Bobby Ong

In this episode, Bobby Ong, co-founder of CoinGecko is joined by Tascha Punyaneramitdee, Project Lead at Alpha Finance. Bobby interviewed Tascha on the background of Alpha Finance Lab, Alpha Homora V2, Alpha token and its use cases, the risks of lending on Alpha Finance as well as their upcoming plans.

[00:00:02] Intro
[00:01:20]
Introduction of Alpha Finance Lab
[00:02:08]
Alpha Homora V2
[00:06:54]
Lending risks on IBETH
[00:12:00]
Partnership with Aave
[00:21:27]
Plans for Alpha Homora
[00:23:41]
Use cases and plans for Alpha token
[00:30:47]
Where to follow Alpha Finance Lab?

Quotes from the episode:

“Alpha Homora V2 is actually coming up. So, that is something that we will continue to share more of in our community going forward and how it's really special in terms of features and functionalities.” [00:02:30]

“Right now ETH lenders are earning 25% on lending ETH, which is, you know, 25 times higher or even more, 25 times or more higher than other lending protocols.” [00:06:01]

“So before we launched the partnership and integration with Aave, our total value locked was about 54 million. Um, and right now it's about 61, 62 [million].” [00:30:17]

Links

Alpha Finance Lab - https://alphafinance.io/
CoinGecko - https://www.coingecko.com/
Alpha Finance (ALPHA) on CoinGecko - https://www.coingecko.com/en/coins/alpha-finance

Social Media

Alpha Finance Lab:
https://twitter.com/alphafinancelab
https://t.me/AlphaFinanceLab

CoinGecko:
https://twitter.com/coingecko
https://t.me/coingecko

 

Show Notes Transcript

In this episode, Bobby Ong, co-founder of CoinGecko is joined by Tascha Punyaneramitdee, Project Lead at Alpha Finance. Bobby interviewed Tascha on the background of Alpha Finance Lab, Alpha Homora V2, Alpha token and its use cases, the risks of lending on Alpha Finance as well as their upcoming plans.

[00:00:02] Intro
[00:01:20]
Introduction of Alpha Finance Lab
[00:02:08]
Alpha Homora V2
[00:06:54]
Lending risks on IBETH
[00:12:00]
Partnership with Aave
[00:21:27]
Plans for Alpha Homora
[00:23:41]
Use cases and plans for Alpha token
[00:30:47]
Where to follow Alpha Finance Lab?

Quotes from the episode:

“Alpha Homora V2 is actually coming up. So, that is something that we will continue to share more of in our community going forward and how it's really special in terms of features and functionalities.” [00:02:30]

“Right now ETH lenders are earning 25% on lending ETH, which is, you know, 25 times higher or even more, 25 times or more higher than other lending protocols.” [00:06:01]

“So before we launched the partnership and integration with Aave, our total value locked was about 54 million. Um, and right now it's about 61, 62 [million].” [00:30:17]

Links

Alpha Finance Lab - https://alphafinance.io/
CoinGecko - https://www.coingecko.com/
Alpha Finance (ALPHA) on CoinGecko - https://www.coingecko.com/en/coins/alpha-finance

Social Media

Alpha Finance Lab:
https://twitter.com/alphafinancelab
https://t.me/AlphaFinanceLab

CoinGecko:
https://twitter.com/coingecko
https://t.me/coingecko

 

Bobby Ong (00:02):
Welcome to the CoinGecko podcast. I'm your host Bobby Ong. Each week we will be interviewing someone from the blockchain industry to learn more about this fast moving crypto currency economy. If this is your first time listening, then thanks for coming. The CoinGecko podcast is produced each week to help you stay ahead of the curve. Show notes can be found at podcast.coingecko.com. I highly encourage you to join our newsletter where we send out top news in the crypto industry every Monday to Friday. Come back often and feel free to add the podcast to your favorite RSS feed or iTunes. You can also follow us on Twitter and Telegram at @CoinGecko.

Bobby Ong (00:38):
Welcome to the CoinGecko Podcast. For today’s episode, we have the honour of welcoming Tascha Punyaneramitdee, Project Lead at Alpha Finance. A little bit more about Tascha. Tascha was a UC Berkeley graduate and previously worked in investment banking in San Francisco and London. She was also previously a Product Manager at Tencent and was the Head of Strategy at Band Protocol before starting Alpha Finance Lab. We are very happy to have Tascha join us on the CoinGecko Podcast today. And I have been a big fan of Alpha Finance, been using the product for some time, so welcome Tasha and I'll ask her more about Alpha Finance today. Welcome.

Tascha Punyaneramitdee (01:10):
Yea, great to have be on and thank you, Bobby. We have been working on several instances together and really happy to have you as our users too.

Bobby Ong (01:20):
Yeah, I guess for the first question, right, for the benefit of CoinGecko community who are not so familiar with Alpha Finance, maybe can you explain to us in simple terms, what you guys do at Alpha Finance?

Tascha Punyaneramitdee (01:29):
Yeah. So you can think of Alpha Finance Lab as a cross chain DeFi lab. And what that means is we are building a number of DeFi products on multiple chains. Each particular product will address its own unaddressed demand or market gap that we see fit. Um, but at the end of the day, all of these products will work together to achieve the overarching theme of how do we maximize the returns while still minimize the downside exposure, because we think that's the ideal financial product suite. If you can find a way to maximize returns and also minimize the risks or downside exposure for our users, then that would be the best solution.

Bobby Ong (02:09):
So you mentioned like cross chain DeFi labs and this seems to imply that it would be multiple DeFi products across multiple different blockchains. At this point in time, I guess you have launched your first product, which is [levered] yield farming product on Ethereum. Maybe tell us a little bit more about this product and what other products that you guys have in mind moving forward?

Tascha Punyaneramitdee (02:30):
Yeah. So Alpha Homora V2 is actually coming up. So, so that is something that we will continue to share more of in our community going forward and how it's really special in terms of features and functionalities. Another product that's coming up is a perpetual swap product. So that itself will focus more on, you know, capturing perpetual swap traders. So that will be a different target. But at the end of the day, it still brings synergy to Alpha Homora users because the users on Alpha Homora who are [inaudible], they can also take the opposite position to make sure they hedge out the risks and also, uh, make sure they're still gaining from, from the yields on Alpha Homora. So once we launched that perpetual swap product, it will also integrate with Alpha Homora and offer the synergy. And the perpetual swap product itself will be on both Ethereum and Binance Smart Chain. So that's the beginning of the expand to, expanding to other chains as well.

Bobby Ong (03:31):
And the current, like your token is sort of on Ethereum and Binance Smart Chain, if I recall correctly?

Tascha Punyaneramitdee (03:39):
Well, they're on both.

Bobby Ong (03:39):
It was started on Binance Smart Chain at the start, right before it went to, it was ported to Ethereum or was it on Etherum before going to Binance Smart Chain?

Tascha Punyaneramitdee (03:47):
It appears on both.

Bobby Ong (03:47):
At the same time? Alright.

Tascha Punyaneramitdee (03:48):
Right.

Bobby Ong (03:48):
Maybe let's walk through the first product in detail, right? So your first product is Alpha Homora and it is levered yield farming product, right? So maybe tell us a little bit more about what it does and why is it interesting and this is the first product of its kind in the market?

Tascha Punyaneramitdee (04:04):
Yeah. So there are a number of market gaps that we saw and instead of letting them go, we were thinking of like, how can we capture this because it's not small. So the first market gap that we saw is that there are a lot of ETH holders, bearing very low interest rate on ETH. And I'm sure if you ask any ETH holders, they're going to say they want higher lending interest rate. Um, so that's already one market gap. Another one is also that, there are also a lot of yield farmers out there that are still searching for higher yields because they're used to, you know, the four digit yields back in July and then over the summer, right? So they're willing to take on more risks to also maximize their yields. Um, so when we match the two, we created Alpha Homora, which is a platform for ETH lenders to learn and earn high interest rate on ETH. They are not, you know, on exposure to impermanent loss or any other risks at all, apart from lending risks that they also bear on other lending protocol. And they're getting the high lending interest rate from the leveraged yield farmers who are paying and borrow interest rate on ETH because they are getting more returns from yield farming with leverage.

Bobby Ong (05:22):
And this is like the, ETH holders will get the chance to get roughly five to 10% yield on their ETH via this IBETH token, right, which is the Interest Bearing ETH token, right? Maybe tell us a bit more about this IBETH token. And do you expect this interest rate for ETH holders to sort of maintain roughly five to 10% of medium term or do you sort of see these moving up or moving lower? Yeah, just wanna get your thoughts on this.

Tascha Punyaneramitdee (05:45):
Yeah. So it really depends on the utilization rate in terms of how much of the ETH in the pool is being borrowed out. And actually before this podcast, I was just checking it out and the utilization rate is about 90 plus percent. So that means is that, right now ETH lenders are earning 25% on lending ETH, which is, you know, 25 times higher or even more, 25 times or more higher than other lending protocols. If you go and lend ETH on other lending protocols, you would get less than 1% or around 1%. How I expect it to be going forward, I think a lot will be determined by Alpha Homora V2, which I will continue to share more in the coming weeks. A lot of the features are really, really interesting and I think it will open the space to even more types of users and create a new design space that we can innovate with.

Bobby Ong (06:39):
Essentially this yield on ETH holders is dependent on the utilization. So if there's more demand for ETH to do sort of thing, margin trading or whatever, then the yields that the ETH holders can get will increase over time. Right?

Tascha Punyaneramitdee (06:52):
Correct.

Bobby Ong (06:53):
Interesting. What sort of lending risks do lenders take on when they sort of put their ETH into this IBETH vault?

Tascha Punyaneramitdee (07:03):
So, similar to other lending protocols in a sense that typically lenders lend the asset, any asset, right, then there would be the borrowers who borrow those assets. And if those borrowers don't pay back, then you are at risk of not getting your ETH or any asset back. But typically there is a liquidation model or even an incentive for other liquidators to also liquidate and pay these debt to make sure that the lenders get their assets back. So we also have that mechanism and right now liquidators, you know, there are a lot of bots running and pretty much checking through our system and see which position they can liquidate. Because they are incentivized to do so. So they can actually get 5% of the position value for liquidating those debts.

Bobby Ong (07:53):
And this bots that you spoke about to sort of automate the liquidations on Alpha Homora, is this sort of like the partnerships that you sort of have with Keep3R, KP3R, with Andre's Keeper project?

Tascha Punyaneramitdee (08:04):
Not really because typically Alpha Homora itself does not need to rely on bots because Alpha Homora takes the custody of the assets. So what that means is that, when the assets or the de-position is reaching the liquidation threshold, then you can actually automatically liquidate itself. But there are incentives for other bots to do so as well to make it more efficient. So, you know, when there are incentives, then somehow these bots come and join the party. Um, so they actually do it a lot faster than us doing it ourselves. So those bots are pretty much helping maintaining the liquidation system when we're not, you know, asking them to do so.

Bobby Ong (08:48):
Yield farming is sort of, I mean, there's a risk to the yield farmer in a sense that yield farming on Uniswap or SushiSwap, you sort of take on the risk of impermanent loss. Taking impermanent loss and multiplying it by the, by the leverage that you're doing. So if there's like a loss of 10% and you're doing 2.5 X, you multiplied that 10% loss. Do you think this is sort of dangerous for like the average retail guy or, I mean, these are guys that don't mind the impermanent loss that they may [inaudible] leverage in yield farming?

Tascha Punyaneramitdee (09:17):
Hm. So a lot of points to be addressed on that front alone. The first point is that with the current solution, the Alpha Homora V1, we first target those who are willing to take that risk to get more chance of increasing their yields. So that's the first target users, but with Alpha Homora V2 that we're launching, um, there are a number of functionalities that we can actually expand beyond the first group of users that we already have targeted. Um, so there would be some functionalities that actually make it a lot more friendly to those users who don't want to take that risk. That would be the second part to my answer. The third part is also that, you know, when we have seen a lot of traction coming to adopt Alpha Homora and the fact that, you know, it's higher, [I out] impermanent loss, uh, we actually have thought of another product, uh, which will also solve this problem. And it's something that we are, uh, doing more research on. So pretty much apart from Alpha Homora V2, which we are building, apart from perpetual swap product, which we have already built, um, we are also thinking and working on this new idea to solve this problem.

Bobby Ong (10:29):
Yeah. I mean, I was putting in some ETH into one of these yield farm, and I basically just went to Alpha Homora and saw, and just see which one was offering the highest yield. And at that point in time when I was putting in some of these ETH, the ETH- USDT pool on Uniswap was one of the highest yield at that point, I think it was 150% or something at 2.5X. So I said, "Alright, let me just put some ETH in and then let's see what happened." So it turns out, ETH had a massive run up in the following weeks. And then like due to that, I had some sort of impermanent loss, which is multipled made worse because of the levered yield farming. So I thought that was, was interesting concept, but like I think for a lot of people, like they may or may not be too aware of some of these impermanent loss that they could incur if they are not careful with some of these pools. But yeah, I thought it was interesting by itself. If you know, what you're doing is definitely a good thing. So yeah. Let's talk about Alpha V2, Alpha Finance V2. You sort of mentioned it a few times in a podcast, like when is it coming? What are the features? Tell us more about it.

Tascha Punyaneramitdee (11:30):
Yeah. So it should come early next year. And feature wise, we're going to save it for our community in the coming week. It is something that, you know, quite a major change and pretty much it's going to double down on this leveraged yield farming, leveraged liquidity providing arena. So we're going to aim to continue innovating in this space while we build other products to help minimize the downside exposure.

Bobby Ong (12:00):
And, and recently you guys announced a partnership with Aave. Tell us more about this partnership and why is it interesting?

Tascha Punyaneramitdee (12:06):
Yeah, it's interesting because you can already just gain from borrowing the ETH from Aave and paying the about 1% borrow APY, um, and then lend that ETH on Alpha Homora and then earn, let's say 25%, which the current rate. So if you just do that, you would already gain the difference, right? And for doing this, we just make it so easy and simple for the users. Be it, those who already lend on Aave or be it, those who haven't an lemd on Aave. So if you go to Alpha Homora site, um, there's going to be a tab called 'Earn On Aave + ETH'. And if you click on it, it will start earning, then there are pretty much three simple steps. The first step is you decide which other assets you want to lend on Aava and be used as collateral. Or if you already have lent and turned on the collateral, then you can skip the next step and then borrow the ETH from Aave and then lend that ETH to Alpha Homora.

Tascha Punyaneramitdee (13:03):
So pretty much it's all, you know, in three simple steps without having you to go back and forth between Alpha Homora and Aave. Yeah. And I think this is also helpful for, for not only Alpha Homora, in a way that more liquidity is being poured into Alpha Homora and as a result, the leveraged yield farmers that [inaudible] providers have more liquidity to take leverage on, but it also benefits Aave because now people who haven't been on Aave will be lending on Aave. And those who have already lend on Aave will make more usage of ETH that's lying around in Aave. Um, and, and borrowing those ETH to lend on Alpha Homora.

Bobby Ong (13:47):
Getting back to the Alpha Homora, I mean, what I noticed was since the launch of your product and until now, you've been adding quite a lot of pools on to Alpha Homora. I guess my question is, how do you guys decide which pools to add onto Alpha Finance? Do you plan to allow all pools to be added? What's the criteria?

Tascha Punyaneramitdee (14:07):
Yeah. So a number of criteria. Well, typically we would prefer, I mean, not prefer, but it has to have a lot of liquidity. So we have a certain threshold that we, you know, if it's below that liquidity threshold then we won't support it. And that's mainly because if the liquidity is too low, then it would be, there would be some rooms for attackers to actually manipulate the price. So it would not be safe for us to offer leveraged yield farming or leverage liquidity providing to those pools. Um, the second criteria is going to be more of, you know, whether those pools have high yields. So the yields can be coming from yield farming. Let's say, when Uniswap giving Uni or SushiSwap giving Sushi or like Index Coop giving Index, right. Or the yields can be coming from the high trading fees. So like the ETH/YFI pool on Uniswap, that will has pretty high trading fees alone. So you can also take leverage on that position and also earn more trading fees on that pool already.

Bobby Ong (15:10):
Essentially you are finding pools that can provide high ROI for the users, because these are the pools that are interesting to the users at this point in time, right?

Tascha Punyaneramitdee (15:19):
Yeah. Another point is also even if some pools, you know, meet the liquidity, don't have that high ROI but decent, but their communities are really strong, then we will also add these pools. Because I think, you know, as we continue to grow Alpha Finance Lab and Alpha Homora, we want to benefit and bring benefit to other strong communities too. So they can also make use of their tokens and, you know, uh, join our Alpha community.

Bobby Ong (15:47):
And some pools have like 2.5X leverage, some pools have 1.5 or 1.75, like how do you decide? And some pools have only 1X, there's no leverage that you can apply on this pools. Like, how do you guys decide which pools get 2.5X, which pools only get 1X for example?

Tascha Punyaneramitdee (16:06):
Hm. So on several parameters that we really look at, the first one is, you know, the liquidity in the pool itself. If it's too around the borderline of the threshold that we have, but we want to support it, maybe that's because the community is really strong, maybe the ROI is good for the trading fees, then we will offer it at 1X because it's around the threshold. We don't want to risk it. Um, the second parameter is also on the pretty much the price volatility. So let's say if the price moves a lot in the past, and it may not be good to offer 2X but it might be better to offer like 1.5. So that's pretty much the two main things.

Bobby Ong (16:49):
And is, do you see like the leverage ratio of 2.5X being the highest that you guys could offer or do you see a future where it could be higher, for example, 5X or 10X leverage on this yield farming pools?

Tascha Punyaneramitdee (17:03):
So it's highest for ETH. So if you're taking leverage on ETH, I think 2.5 is the highest we're offering, but that doesn't mean that, you know, that's going to be the maximum we're offering because Alpha Homora V2 will have a number of functionalities, a little hint there, um, that we can even, you know, create a different kind of types of leverage. So eventually it's going to be even higher than 2.5.

Bobby Ong (17:28):
Okay, interesting. And one of the things that, the benefits that you guys do with Alpha Homora is like, for example, if it's a incentivized pool, like on Uniswap previously or SushiSwap these days, where the WBTC-ETH pool, you sort of deposit ETH and then you split it up into WBTC, and then you, you farm Sushi token, which you harvest and then you dump and then buys back more of these underlying tokens, right, to the LP pool. So, I mean, obviously it saves a lot of gas fee for the average yield farmer. Uh, I guess my question is how often do you harvest and buy back the underlying token, add it into the LP pool and then repeat this whole process?

Tascha Punyaneramitdee (18:06):
Hm. Yeah. So this is actually done by the other users, which we call the re-investor. So these re-investors can reinvest directly from the front end, uh, and pretty much they are incentivized to do so because they're getting 3% of the total rewards in that pool. So they can typically just calculate, you know, if the 3% that they're getting is going to be worth it based on the current gas price. So if it's worth it, then they would do it. And, and typically we have these re-investors helping us to reinvest every couple of hours or so. Um, so that also not only benefits the re-investors themselves, but also benefits the users who have the positions open as they also earn from these reinvestment that happens. But from, from how we think of it going forward, is that, for Alpha Homora V2, one of the thing that we want to do is establishing ourselves and bringing more synergy to other projects more so. So what we're doing is also offering an opportunity for users to select whether they want to reinvest or not, because we want to keep it open. Maybe there are going to be a lot of users who don't want to reinvest and sell these tokens. Maybe they want to actually farm these tokens and use it for maybe governance purposes or other future use cases of these tokens. Right. And I think this will also help the other projects more on the long-term, like SushiSwap, they also want to promote more governance community. So I think this will also go align with what they are planning to do.

Bobby Ong (19:41):
Yeah. I thought what you guys have with that reinvestment tab was interesting because for a lot of these protocols, like only the developers could sort of like conduct these liquidations and this reinvestment sort of thing because you typically no front end for these things and you sort of have to run a bot to check on all the, I mean, from Maker's case, CDPs that are open. They are sort of near the liquidation thresholds on Compound or Maker. And those that are at risk, only the developers will be able to call the contract and liquidate these things. Whereas I know what you guys did was pretty interesting. For the first time as a non-technical user, I could sort of see all the positions that are sort of at risk and to sort of liquidate them if I wish to. Uh, so I thought it was an interesting product design decision. Why do you guys choose to do such thing to make it like open for the front end for users to sort of do it?

Tascha Punyaneramitdee (20:30):
Yeah, I think one of the key things that we really care about is user friendliness. So if you, you know, use our product and you follow our Twitter, uh, one of the key theme is pretty much making sure it's a few steps for users to do such things. So like for example, in order for you to farm, you just do three simple steps. Select the pool, enter how much and which asset you want to use to farm, and then number three, enter leverage, right? Everything is taken care off by Alpha Homora. And same for Aave and Earn on ETH, it's three simple steps. So we think that user friendliness part is really important going forward, especially when we are looking to expand the DeFi landscape further and not just extracting more usages from the current DeFi users. So I think this, the fact that we're, you know, focusing and doubling down on making sure it's user friendly, we'll make it more welcoming to the new DeFi users.

Bobby Ong (21:27):
I think earlier during the podcast, you mentioned that Alpha Homora is sort of on Ethereum and also on Binance Smart Chain and you guys are thinking of building DeFi on several different blockchains. Besides Ethereum and BSC like, which are the chain do you think DeFi is going to grow in the coming six months, a year? And do you have plans to, I don't know, built on Polkadot or some of the chains, for example?

Tascha Punyaneramitdee (21:50):
Yeah, just a quick clarification, right now, Alpha Homora is on Ethereum, but the perpetual swap product that we're building will be on both Ethereum and Binance Smart Chain. And pretty much how we look at it is that, I think next year is going to be really, really interesting for different chains and also L2 when a number of chains are coming to life, pretty much. And with all the tool sets, all the developer toolkits. And for L2 itself, they are coming live and bring more adoption to them. So I think we're gonna wait and see how the arena plays out. Especially when one month in DeFi is already really long. Especially here at Alpha, it's like a year, uh, elsewhere. So we're gonna, of course, you know, have a close look at all the solutions out there and then see which one fits the most with what we are aiming to achieve.

Bobby Ong (22:40):
Yeah. I mean, I think you've got a good point. I mean, it's really hard to plan things ahead of time because things move so fast. I mean, I get questions like, "What's CoinGecko's product roadmap for 2021?" And then a lot of time, I guess like, I don't know, let's see what happens in crypto in six months time, like we change and adapt. So I guess, my guess is you guys kind of follow the same method as well. You have sort of a rough roadmap but the exact details you don't know and see what happens and plays out next year. Right?

Tascha Punyaneramitdee (23:09):
Yeah. I think it's also very important to make sure you are aware of what are the current market gaps and, and see how you can innovate and capture that. Because if you just stick to your old plan and not listening to the market, then you can catch the wrong wave.

Bobby Ong (23:25):
Yeah. I completely agree on that. It's sort of like how we work on things over here because it's so hard to like have a firm, if you have a firm plan and you stick to it at all costs, like you usually end up building things that are out of trend when it's finally out.

Bobby Ong (23:38):
Let's talk about the Alpha token, right? So you guys have an Alpha token, which you are sort of giving out to people who are doing leveraged yield farming on Alpha Homora. Maybe tell us a little bit about how these tokens are distributed and what is the use case of this Alpha token? I mean, the token have been gone up, has gone up in price quite significantly the past month or so. Yeah, I'd like to hear what's the use case and what's the plan for alpha token.

Tascha Punyaneramitdee (24:04):
So in terms of the first part of how we're distributing, we are distributing Alpha in two ways right now. So the first way is to anyone who opened leveraged positions of more than 1X on Alpha Homora. So pretty much these are the ones who are borrowing the ETH and contributing to the lenders. And then the second way is for those who are providing liquidity to IBETH Alpha pool. So that will be in under the tab called 'Alpha Pools'. So if you provide liquidity to IBETH Alpha pool, you're actually getting Alpha back in a form of high trading fees. So which we actually call this program, Trading Volume Mining. It's a little different from typical, you know, liquidity mining, which you get airdrop of Alpha token, right? But for this one, you actually get Alpha in a way of high trading fees. So I think it's about 200 plus percent right now for the trading fees in that pool.

Tascha Punyaneramitdee (24:59):
So that's incentivized by us, um, in Alpha tokens. And for the second part of your question, so, you know, the usages of governance token, or like Alpha token, there are a number of them coming up. So with the current stage, It's a governance token, but when we launched more products, for instance, our perpetual swap product, we're going to bake in the security functionality in a sense that users can, you know, stake and participate and pretty much help ensure the security of that protocol, uh, in exchange for the protocol fees. So that's something that's coming up next. The two other functionalities that are, you know, something that we're thinking of as well, but it's just a matter of time of implementing it because the timing really matters when you implement these things. Uh, the first one is how, we call it The Work token. What that means is that you can actually use Alpha, if you hold Alpha, you can use our products better than if you were not to hold it.

Tascha Punyaneramitdee (25:59):
So for instance, right now, if anyone use Alpha Homora, you can open at most 2X, I mean 2.5X leverage, right? But in the future, when we implement this functionality of Work token, uh, if you hold Alpha, you can actually open for instance, 3X. So more than, you know, typical, uh, or other users who don't hold Alpha. And that's why we call it Work token. The fourth one, which is going to be even further down the line when we have a lot of products, achieving multiple usages and also high adoption, then we're going to also planning to implement what we call the interoperability token. What that means is with Alpha token, you will be able to not only use one product better, which is, you know, under the Work token, but you will be able to use number of product, of Alpha products better.

Tascha Punyaneramitdee (26:50):
So for instance, if you are using Alpha Homora already and you want to open the opposite leverage ETH long position on perpetual swap product, then you would be able to do so, you know, in a very simple and user-friendly way, if you hold Alpha. If not, then you have to go to the perpetual swap product that we built and then, you know, open the opposite position yourself. So that's one of the plans that's coming up. And all of these all depend on once we reached certain usage level and really high adoption level, then we're going to consider implementing these.

Bobby Ong (27:25):
Hmm. That's interesting. I like the third use case where it's like a membership token, where without this Alpha token, you can't farm at a higher leverage. Uh, you sort of need it to upgrade your farming, your leverage that you can use on Alpha. Yeah. Yeah. It's interesting. And the other two was also, the first two was a sort of interesting use case as well. So I mean, using, using Alpha Homora obviously comes with risk, main one being smart contract risk. And whether you are on the, providing ETH on the IBETH ward or providing ETH onto the [levered yield farming], there's always the risk that your smart contract could be hacked and the funds could be drained. Obviously, I believe you guys have had like your smart contracts audited, but I mean, things can always happen. Like I believe you guys recently have a Nexus Mutual pool open recently so that users can buy insurance, but I'm just curious, I haven't really checked, but what would be the cost of buying insurance or protection on this Alpha Homora contracts?

Tascha Punyaneramitdee (28:23):
Ah, I see, yeah, the cost is, it can get lower. Um, so there still is a room for a Nexus Mutual users to stake and also offer these coverage. So as time goes on, as we establish our names and as more people use Alpha Homora, I think they're going to be more Nexus Mutual members who stake and bring down the costs. So I think, yeah, but definitely it's something that Alpha Homora users can already, you know, buy the coverage of. Um, so, so I think that's already a great start in terms of offering that insurance against smart contract risk. But another point that you brought up is interesting in terms of the risk itself does not limit to a smart contract, right? The risk goes on to [inaudible] risk or impermanent loss risk. And these are something that we are also, uh, looking to tackle with the upcoming of our products, be it Alpha Homora V2, be it, perpetual swap product, be the new idea, uh, which cannot share yet, that we are working on.

Bobby Ong (29:25):
Ya, I think it would be interesting if like, I mean, if I can yield farm with zero impermanent loss risk, like that will be super interesting. Just getting the returns and that return can like outperform, just holding ETH like, I mean, that's kind of, I dunno how it can be done, but, but I mean sort of like putting ETH into the IBETH. I mean, at 25%, like that's pretty good, but I mean, it fluctuates, I mean the last time I checked was around 8%, but 25% at this point in time, super high. I thought it would have gone down by now because after your partnership with Aave like people would have borrowed ETH on Aave and put it onto Alpha. I mean, it makes the difference, right? But seems like people are not realizing the differences yet at this point in time.

Tascha Punyaneramitdee (30:03):
Actually they are. Um, but what we're seeing is that more leverage yield farmers are taking on leverage as there continues to be more liquidity. So I guess once we grow the supply, the demand also grows. I think that's a very positive feedback loop. So before we launched the partnership and intergration with Aave, our total value locked was about 54 million. Um, and right now it's about 61, 62. Yeah. So that's only a day. And the fact that, you know, the TVL grows while the utilization rate grows and the ETH lending interest rate grows as well. I think that's a very strong, positive feedback loop that we have achieved.

Bobby Ong (30:42):
Yeah. Um, I think that's a lot of interesting plans that you guys have at Alpha. What would be the best place for, for someone to follow and learn more about Alpha if they are interested to know more about Alpha Finance.

Tascha Punyaneramitdee (30:54):
So Twitter, you know, is the best place, if you don't want to chat with us. If you want to chat with us, then of course the Telegram, Alpha Finance Lab or Discord. So these are also available on Twitter itself. So you can click on those links on our Twitter site. And we also have our own blog. So blog.alphafinance.io, which we have a lot of detailed instructions on using Alpha Homora or even, you know, upcoming plans and vision of Alpha Finance Lab. So you can spend days and weeks reading our blogs if you want to.

Bobby Ong (31:29):
Yeah. I definitely spent a lot of time reading every article that was published on Alpha Homora in the early days. And it was sort of confusing for me at the start when I first heard about Alpha but after reading the blog, every single post, I sort of get the idea what you guys do. And it got me really interested in this product. So yeah. Um, I guess that's all the questions I have for you today. So thank you very much for taking the time to come on the CoinGecko podcast and to explain what you guys do at Alpha. Very excited and hope to hear more good news from you guys soon.

Tascha Punyaneramitdee (31:55):
Yeah. Sounds good. Thank you so much and very nice being here.

Bobby Ong (31:59):
All right, that wraps up the show. Thank you for listening to the CoinGecko podcast with Bobby. If you like our show and want to know more, check out podcasts.coingecko.com or please leave us a review on iTunes. If you have any feedback, do drop us an email at hello@coingecko.com. Join us for more next week. See ya.

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