AMA with Tascha from Alpha Finance

An AMA with the Project Lead at Alpha Finance Lab, an Ecosystem of DeFi Products. 🚀 SUBSCRIBE TO NEWSLETTER: http://bankless.substack.com/​ http://bankless.substack.com/%E2%80%8B ✊ STARTING GUIDE BANKLESS: https://bit.ly/37Q17uI​ https://bit.ly/37Q17uI%E2%80%8B 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/​ http://podcast.banklesshq.com/%E2%80%8B 👕 BUY BANKLESS TEE: https://merch.banklesshq.com/​ https://merch.banklesshq.com/%E2%80%8B ----- 💪BECOME A BANKLESS PREMIUM MEMBER: http://bankless.cc/membership​ http://bankless.cc/membership%E2%80%8B ------ GO BANKLESS WITH THESE SPONSOR TOOLS: ⭐️ AAVE - BORROW OR LEND YOUR ASSETS https://bankless.cc/aave​ https://bankless.cc/aave%E2%80%8B 🚀 GEMINI - MOST TRUSTED EXCHANGE AND ONRAMP https://bankless.cc/go-gemini​ https://bankless.cc/go-gemini%E2%80%8B 💳 MONOLITH - GET THE HOLY GRAIL OF BANKLESS VISA CARDS https://bankless.cc/monolith​ https://bankless.cc/monolith%E2%80%8B 📱 DHARMA - MOBILE ONRAMP DIRECTLY INTO DEFI https://bankless.cc/dharma ------ 📣LATTICE | NEXT GENERATION OF HARDWARE WALLETS https://bankless.cc/gridplus ------ AMA with Tascha from Alpha Finance Alpha Finance Lab (https://alphafinance.io/ ) is an ecosystem of DeFi products including Alpha Homora (https://homora.alphafinance.io/​ https://homora.alphafinance.io/%E2%80%8B), which released its V2 upgrade in January 2021. Tascha is Project Lead and Co-Founder. Tascha on Twitter https://twitter.com/tascha_panpan?s=20​ https://twitter.com/tascha_panpan?s=20%E2%80%8B ------ Don't stop at the video! Subscribe to the Bankless newsletter program http://bankless.substack.com/​ http://bankless.substack.com/%E2%80%8B Visit the official Bankless website http://banklesshq.com/​ http://banklesshq.com/%E2%80%8B Follow Bankless on Twitter https://twitter.com/BanklessHQ​ https://twitter.com/BanklessHQ%E2%80%8B Follow Ryan on Twitter https://twitter.com/ryansadams​ https://twitter.com/ryansadams%E2%80%8B Follow David on Twitter https://twitter.com/TrustlessState ​ ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time we may add links in this channel to products we use. We may receive commission if you make a purchase through one of these links. We'll always disclose when this is the case.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Ryan Sean Adams?

  Scored, we will prioritize those questions. You can also ask your question on YouTube. David and I will be checking in on YouTube, getting your questions queued up. This is really an opportunity for you guys to ask questions of Tascha and of the Alpha Finance Project. We do this on the YouTube and then we also put it out on the podcast too. So if you prefer listening to it in podcast format, you can get it that way too. David, we should just introduce folks to Alpha Finance and Alpha Homora specifically. What do you want to say as an intro to this exciting, cool project?

• 0:37David Hoffman?

  Yeah, it's really exploded into the forefront recently, which is and it's always pretty cool when a project does that, when it just rises out of the very chaotic world of DeFi into the forefront of people's minds. The Alpha is famous for being able to provide really, really, really strong yields on Ether, above and beyond what you would get from ETH staking. And the way that Alpha does that is what we call, what they've called leveraged yield farming. So I have my questions as to what that entails, how risk is controlled, what the participants are in the system. Apparently Alpha is originating more loans than AVE, which is pretty insane,

• 1:16David Hoffman?

  because AVE is like the canonical lending platform. So we're going to get into all these questions in just a little bit, but before we do, we're going to talk a little bit about these sponsors that make the show possible.

• 1:30Ryan Sean Adams?

  All right.

• 1:30David Hoffman?

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• 2:11David Hoffman?

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• 2:54David Hoffman?

  that makes using Aave even more powerful. With Aave, you can leverage the full power of DeFi money Legos, yield and composability all in one application. On Aave, there are a ton of assets that you can deposit in order to gain yield. And all of those same assets can also be borrowed from the protocol if you have deposited collateral. Here you can see me getting a 200 USDC loan against my portfolio of a number of different DeFi tokens and ETH. I'll choose a variable interest rate because it's a lower rate than the stable interest rate option. But I could choose the stable interest rate option if I wanted to lock that interest rate in permanently. One of Aave's V2 features is the ability to swap collateral without having to withdraw your assets,

• 3:38David Hoffman?

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• 3:55Ryan Sean Adams?

  All right, guys. We are back with Tascha from Alpha Finance for this community Ask Me Anything. Tascha, how are you doing today?

• 4:03Speaker 02

  Good. Thanks for having me.

• 4:05Ryan Sean Adams?

  Tascha, I want to get into your background actually first and talk a little bit about where kind of you came from. So you've got "Investment Banker" in your Twitter bio. So maybe you might be the first banker guest we've had on Bankless, which is kind of fun. So tell us how you fell down the DeFi rabbit hole and found yourself building a DeFi protocol.

• 4:30Speaker 02

  Yeah, so you know, since when I was studying at UC Berkeley, I've always been interested in in crypto and blockchain space. And you know, Berkeley and the barrier are very, you know, tech savvy and friendly space, right? So that's how I first got exposed. And then it just keeps studying, learning more about the whole space. And generally, I I like finance and I like tech, right? So you know, when I first started my career, I decided to join a tech investment banking role. So that means that I'm doing financial services for tech clients across the US and across the Europe as well. And then when DeFi started to become more, you know, dominant and also becoming the main use case of blockchain,

• 5:15Speaker 02

  that's when I really got, you know, very, very excited and trying to learn more about it. And pretty much, yeah, after finance role, I pivoted to more tech, to product management at Tencent, and then pivoted to more blockchain at Ban Protocol, and then now DeFi, right? So it's been a journey, but you know, it's been quite some time that I've been interested in studying the whole space.

• 5:41Ryan Sean Adams?

  That is super cool. So did you come into crypto by way of more DeFi? Or did you come more by way of like, like the Bitcoin sort of path?

• 5:50Speaker 02

  It's the Bitcoin path.

• 5:52Ryan Sean Adams?

  Okay, gotcha. So you started with Bitcoin and then and then went into kind of the DeFi side of things. Okay, well, so tell us about Alpha, Alpha, really Alpha Finance, and why you decided to to focus on the the areas that you're focusing with this DeFi protocol?

• 6:09Speaker 02

  Yeah, so you have to to think Alpha Finance as a DeFi lab. And what that means is that we're incubating and innovating a number of DeFi products. The goal of each of the products to be different. So the problems we're solving will be particular to particular area for each product, right? But then at the end of the day, all of these products will work as an ecosystem. And then the whole ecosystem, we're focusing on the main goal instead, instead of focusing on one particular area of DeFi that we want to innovate in. So the main goal that all of these products as an ecosystem will work towards is to maximize the returns for users and also minimize the downside risks.

• 6:52Speaker 02

  So, um, you know, once we achieve this goal, then of course we would go for the bigger goal. Um, and ultimately, at the end of the day, uh, we are here to hopefully change, uh, and in pretty much reform traditional finance. Um, but you know, given the finance keep now, given the regulatory's landscape, uh, it would be some time. So, so what we're doing now is pretty much trying to make, uh, very useful, um, and staying at the forefront of DeFi and pretty much, um, grow Alpha and DeFi to the point where we can make, you know, more, um, and in bigger impact, uh, later down the line.

• 7:26David Hoffman?

  So this is a theme that we've seen arise out of a number of projects that came out of DeFi summer and just the most recent cohort of DeFi projects. Uh, notably, Yam started off as this rebasing thing, but then it grew its treasury and now it produced the umbrella protocol. And so it's kind of acting like a DAO where that just produces products. Uh, we're also seeing the same thing out of Sushi Swap, which first started with a clone of Uni Swap and now has Bento Box, which is something totally different, a borrowing lending platform. Uh, would you say Alpha is, is similar to that? Or is the, the, uh, product side of Alpha and like the DAO side of Alpha different? Well, how would you compare and contrast these different organizations that are living on chain?

• 8:07Speaker 02

  I think there, there are multiple differences, right? Like the first one is, um, it, I think it, it like how we progress and how the other progress may be different. Um, the end goal may be the same in which that there are multiple products as an ecosystem. Um, but for Alpha, we created as the, as the first day, knowing that it's going to be an ecosystem. So that means that we structured a team, uh, the way that we work, the way we build are, are, are a bit different. Uh, we're always going to be on the lookout of new opportunities, uh, trying to see which market, um, is looking for which product. Perhaps let's say if we come up with a new product tomorrow that we think that, you know, it really fits with the market landscape right now, you might just ship it, um, before the products that we have announced.

• 8:52Speaker 02

  So, so I think it's more of a dynamic, uh, workflow in that sense. Um, so, so that's the, the main difference, uh, in terms of how we work and how we build, how we evaluate the products, right? The second difference is I think it's the goal that we're focusing on. Or like the area that we're focusing on. So let's say if. Instead of focusing on all the products that we work on, we're actually focusing on the end goal that I mentioned. So let's say if one particular product allows us to achieve that goal better than you know. Then that means that we have to focus on that product more, right? So I think that. That whole thing comes back to to the the fact that we are building an ecosystem since day one.

• 9:36David Hoffman?

  So with that under as like the kind of the social contract of Alpha, an ecosystem from day one. That means that you need a team that can manage an ecosystem, right? That's more a more specific skill sets and and straight up more of a of a larger team. So how did you? How did the Alpha team assemble? Where did all of these people come from and who are they?

• 9:57Speaker 02

  Yeah, that's that's a question that, you know, I could ask a lot. Because, you know, it's been quite a a journey for us from, you know, end of last year to to today, right? So right now the team mostly is based in Thailand. The talent is is pretty top notch, in in my opinion. I mean, others can think differently, right? And pretty much the way that we recruit are are recruiting from Olympics. You know, candidates. And these are, a lot of these are already in Thailand. So Thai people are actually pretty. Strong in computer science and quant to begin with. And then, you know, now that we have a core, strong team, we're going to decentralize the whole team and expand whole team.

• 10:40Speaker 02

  Going forward. So now we're actually recruiting globally. For various roles, for tech, for business development, for marketing, so expanding, not just limiting to Thailand.

• 10:51David Hoffman?

  So when you were assembling this team of of diverse set of skills. You had this product in mind. And so how, what are the core competencies of the team? Like, what is the, what is the, if the team was really good at something? And then how does that relate to that? What is that thing? And how does that thing relate to the product that you guys are trying to build out out of Alpha?

• 11:11Speaker 02

  I think there are two main, I mean, three main things. One thing is that the team has to be really strong in math and coding. I mean, coding is, is, you know, a given, right? Like smart contracts, literacy and everything. But math is something that we really put emphasis on because in order for us to build a cutting edge and innovative products and still be a safe protocol for people to use, math is going to be a really core component. Let's say if you go on Alpha Homora V1 or V2 now, each of the leverage level is, you know, thought through. Nipun, who's the co-founder and CTO, is actually ranked the third in the Global Mathematics Olympiad.

• 11:53Speaker 02

  So he pretty much has done a number of research on what parameter you should go for. For, for, you know, is sushi food. So it's not, not a random number that we are putting out to users to use. I think that's the number one core skill that, that we look for.

• 12:11Ryan Sean Adams?

  It is crazy to me. I just want to make a comment. It's crazy to me that DeFi is starting to attract this caliber of talent now. This certainly was not true in the 2017, you know, cycle. But now it seems like it is true. We're getting top talent into DeFi, working on these projects. It's super exciting.

• 12:28Speaker 02

  Yeah, I think it's, it's shown a lot of, you know, valuable reasons why people want to come in, right? The fact that you are creating a new financial system, the fact that you're, you know, it's in the beginning of the whole new era. You're not late to the game. You're actually creating the whole future. So I think that's, that's how people get, you know, very excited and able to attract these talents in, which is helpful for the whole DeFi ecosystem, I believe, not just for Alpha.

• 13:01David Hoffman?

  So I want to ask about what, what does math unlock? So like, you know, you see, I said that, you know, coding is a given, right? So all of these teams can code, right? And so all the coding isn't really the competitive advantage. It sounds like what you're saying is math is the competitive advantage that the Alpha team has. What does that enable? What kind of products does that enable you guys to access? Because you guys are good at math.

• 13:24Speaker 02

  So to speak on Alpha Homora first, right? Um, the way that it can offer high leverage um and pretty much still uh be on a safe side uh is that everything is processed and and and all the loans and all the funds are held on the smart contract. Um, the way that we do it and the way that we make sure that the parameters are still safe, allowing for buffer even at liquidation, there's still another buffer um to let to allow for more price swing. You know, what's that buffer is gonna be like? How are we gonna be comfortable building a leveraged new farming product while still having, you know, a comfort to ourself, right? So I think that's for Alpha Homora.

• 14:04Speaker 02

  For Alpha X, it's the fact that we are capable of baking in the funding rate payments into the quoted price. So when building Alpha X, which is a decentralized non-order book, um, precious swap trading product, we have in mind um since day one that we are targeting anyone in DeFi who wants to trade a precious swap without having to know that they're trading for precious swap. Um, let's say that you want ten X returns if each price goes up and each price goes up by a hundred dollars and now you're getting one thousand, right? So that's the end goal that you're getting. You don't have to understand anything in between. You didn't have to understand funding rate or rebalancing or anything that is complicated,

• 14:47Speaker 02

  you know, in in precious swap trading, right? So that's the end goal. Now it determines on it it, how do we get there? So math is gonna be really important. How do we figure out a funding rate mechanism that just simplifies everything and makes it just into the quoted price? So when people trade on Alpha X, for instance, uh, it will be similar to a trading on spot market in which the only prices that matter are the entry price and the exit price. So you can just take the two prices and calculate your mid gains and losses without having to um, you know, take into account of funding payments in between as well. So that's a bit of math in our fights.

• 15:28Ryan Sean Adams?

  So Tascha, let's maybe zoom out for a minute and talk high level about these products. Right. So you mentioned two, you mentioned Alpha Homora and Alpha X. And I'm not sure if Alpha X is out yet, but maybe we'll get into that. I know Alpha Homora a bit better. And so that that is basically a way to get like some sort of leverage yield farming sort of opportunities. Could you maybe describe that? And before you do, I'm going to ask a non mathy question. So Alpha Homora, what's with the Harry Potter stuff? Is, are you guys big Harry Potter fans?

• 16:04Speaker 02

  Yeah, Nippon is a really big Harry Potter fan. And you know, with V2, we're generalizing the theme a lot more. So if you go to Alpha Homora V2 site, you can see that the only Harry Potter reference is the O with the lightning.

• 16:22Ryan Sean Adams?

  Okay, okay. So it's like.

• 16:24Speaker 02

  Oh, this is more generalized.

• 16:27Ryan Sean Adams?

  Very cool. All right, cool. So tell us about the product then, what does it do?

• 16:32Speaker 02

  Yep. So as a user, you can use as a two way for, for, you know, to maximize your yields on Alpha Homora. If you are a lender, then you can lend your assets and get high yields. On Alpha Homora V1, the lending assets is limited to just E. And that's because all the loans that leverage you farmers are taking are based on E. So that's why, you know, the lending asset is limited to just E. And that's why it can generate really high lending APY for E holders. Because once you lend these E, it's the leverage you farmers who are borrowing these E to you farm and get the high APY.

• 17:12Speaker 02

  And hence they are willing to pay the borrowing interest rate because they're gaining a lot higher APY on leverage you farming. On V2, the difference is that with the lenders, you're not limited to just ETH. We're expanding, you know, the list of assets in lending pool to be a lot larger. So right now, if you go on V2, you can see that ETH, USDT, USCC, and DAI are assets that you can lend. And then going forward, there would be more assets that you can lend as well, like WiFi, SNX, DPI. And this goes on, right? So Alphamora V2 will continue to grow from the lending aspects and also continue to grow from the leveraged you farming pools as we continue to add more pools aspects to.

• 17:57Speaker 02

  So that's from the lender's side and a bit more detail on the leveraged you farmers side. So once you come in, there are pretty much two main, like several, three main things that Alphamora simplifies for the leveraged you farmers. Number one is of course, you get to unlock that leverage. So that means that you don't have to manually borrow loans from one place and then, which is also over collateralized loans. And then put, compile that loans with your liquidity to begin with and then you farm, right? So we simplify that by having you to take on leverage that is under collateralized loans as well.

• 18:37Speaker 02

  So let's say if you take one ETH to supply, you can borrow like 1.5 ETH. So it's even more than what you supply. So that's the one thing that Alphamora does for leveraged farmers. The second thing is that when you take your liquidity to supply in the first step, you don't have to have equal value of both. So let's say you want to provide liquidity or you farm on ETH sushi. You don't need to have ETH and sushi. You have any proportion, we're gonna take care of that for you, either through swapping optimally or other ways, right? And then third thing is that we complete the whole you farming process for you. So once you supply liquidity, once you determine what assets you want to borrow in what proportion,

• 19:22Speaker 02

  what, once you determine the leverage level, everything is all taken care for you, which means that, you know, taking the LP token to stake, collecting the farm token, all of those things are pretty much all done by Alphamora.

• 19:36David Hoffman?

  So where, I would like to know where the yield actually comes from. And so in my mind, I'm getting an image of like the urine vaults, right? Where there are different strategies that return different amounts of yield based on what those strategies are. And you know, if you want to go peek under the hood, you can go find out what those strategies are. How does, where does the yield actually come from with, with Alpha? Like where is that, are there vaults, are there strategies? Like what is the, the yield generation mechanism?

• 20:05Speaker 02

  So there is one main strategy, which is that it's taking the liquidity you supply and the borrowed funds that you determine to enter at. So let's say 2X leverage, then it's, you know, half of your position is going to be the debt that you borrow. So take all of that and supply to the liquidity providing pool that you select. Let's say you select ETH sushi, for instance, then it will supply to eat sushi on SushiSwap. And then it will take the LP token to stake in the liquidity mining pool for you to claim sushi. So that's, you know, the main strategy for, for all the pools on Alpha Homora. The difference would be, you know, which pool you want to provide liquidity or you farm.

• 20:47Speaker 02

  So let's say the APY on ETH sushi will be different from the APY from Curve3 pool, which is providing USDT, Dai, USDC on Curve farming CRV token. So, so that's, you know, the high level. And then the APY for each of these pool will pretty much be coming from three parts with also minus the borrow APY, so three minus one, right? So the first part is the you farming APY, which is on leverage. So let's say if you were to provide liquidity or you farm on ETH sushi, let's say you would get 15%. And if you take 2X position on Alpha Homora, then that means that you're getting 30%.

• 21:32Speaker 02

  Because you're providing 2X more liquidity, hence you can you farm 2X more of the liquidity and get more sushi, right? The second thing is trading fees APY, which is also on leverage. So let's say if you were to get 10% trading fees APY on a pool and you do 2X, then it would be 20%. The third thing is Alpha APY, which is the current liquidity mining program that we're running, making sure that we help migrate V1 to V2 smoothly. And then, you know, those are all the positive APY. The negative APY is the borrowing interest rates that you have to pay based on what assets you borrow and how much you borrow.

• 22:10David Hoffman?

  So the yield that comes from issuance, other protocols issuance of their like equity token, right? So then the sushi ETH pair that comes from sushi being distributed from the sushi protocol. And then when you talk about Curve, you're talking about yield farming the CRV token. So my mental model has now gone from just Urn and Vaults, but Urn and Vaults plus DYDX, which has margin and leverage, right? So if you slap these things together, are we generally pretty close to what Alpha is?

• 22:42Speaker 02

  Yeah.

• 22:42David Hoffman?

  Cool.

• 22:43Speaker 02

  Or how it is, yeah.

• 22:45Ryan Sean Adams?

  And then what are the risks? So can we talk about a risk?

• 22:48David Hoffman?

  And who's taking risks?

• 22:50Ryan Sean Adams?

  Yeah, yeah, the risk for someone who's doing this kind of, you know, leveraged yield farming.

• 22:56Speaker 02

  So, you know, smart contract risk is always going to be there. We try to mitigate as much as possible, doing various audits, having other builders in the space, reading through the codes. So that's by everyone who's using the product bearing that risk, right? For the leveraged new farmers, your risks are on pretty much making sure that your position will not get liquidated. Because if your debt is too high comparing to the collateral that you put in, then you will reach a liquidation point. So you can monitor with your debt ratio number. So if your debt ratio is at 100%, then that is the liquidation risk that you're in, which means that other liquidation.

• 23:41Speaker 02

  Can come in and liquidate your position. Uh, what that means is that liquidators will get five percent of your position value. And then ninety-five percent, depending on how much debt you have, right? Will be used to pay back the debt that you owe. And then whatever is left is sent back to you as as a user. Um, so that's the risk that users have to be aware, especially when prices swing. Um, and and can make the position be closer to liquidation risk. One one thing to notice that for the curve three pool. Um, because all the components are stable coins. So if you if you supply stablecoin and you're also borrowing stablecoins. Um, then the risk is actually lower than the other pools.

• 24:26Speaker 02

  Let's say ETH sushi that you are providing ETH or sushi and borrowing ETH. So you can see here that the stablecoin pools, assuming that the stablecoins are, you know, to their PEC. Um, then the the the the position is less likely going to be moved. Towards liquidation because the debt portion doesn't really move that much. Um, because of the the PEC system of the stablecoin. Um, so that's on the you farmers, right? On the lenders, um, the risk is that, um, you know, if if the. Positions or you know, leverage positions become underwater. Um, then partially, you know, the the funds in the lending who may be um, used to cover that. Uh, that that loss, right?

• 25:11Speaker 02

  But nothing to to be too worried. Um, we actually have several mechanisms to prevent that. Uh, the first mechanism is that even when it's at hundred percent liquidation. Uh, or it, but even when it's at hundred percent debt ratio, which is the liquidation risk. Uh, we offer another buffer scenario, which means that. At liquidation risk, the positions are actually not underwater yet. Um, so that's the the one thing that we do. The second thing that we do is that um, Alpha Homora B two also takes twenty percent of the borrowings. Uh, borrowers' uh, interest rate to set aside as the insurance funds. So you know, if uh, we have to cover the losses on the underwater positions to cover the debt, right?

• 25:55Speaker 02

  Then um, this insurance funds will be tapped first. Um, before tapping to um, the the funds in the lending pool.

• 26:04David Hoffman?

  A pile of insurance funds, sounds like a fascinating topic that I think there's probably a rabbit hole there. But first, before we go there, I want to ask about the collateralization ratio. Did you just imply that there you could actually have an even amount of debt to collateral in the alpha system?

• 26:23Speaker 02

  Yes. So, so the way that AlphaHomo works, it's not similar to the other, let's say lending protocol. And the key difference is that each asset actually has a collateral credit and a borrowing credit. So this is different for the other lending protocol, or like the mechanism that has been used widely in lending protocol, because in typically, there's no borrowing credit, there's only collateral credit, or the collateral loan to value, right? Let's say if you take one ETH, you can borrow approximately 70% value of that one ETH. And then you can borrow anything within that 70% value of that ETH, right?

• 27:07Speaker 02

  What's different with AlphaHomo V2? And hence, it's kind of harder to calculate what's the exact collateral ratio on top of, you know, anyone's head. You need like the Excel to do it. Because that when you supply, let's say ETH, you would get a collateral credit value. Let's say you get, for instance, one collateral credit value, right? And then if you're going to borrow DAI, DAI will consume, for instance, 0.5 collateral credit. So which means that you can actually borrow two DAI in this case. So assuming that the price is one to one for simplicity, right? But if you collateral with one ETH, and you get one collateral credit, and if you're actually going to borrow Sushi, for instance, Sushi

• 27:51Speaker 02

  would actually claim and pretty much require 1.5 credit to borrow, which means that if you supply one ETH and you have one credit, you actually cannot borrow Sushi, because it requires 1.5. So that's the mechanism that we do, which means that the collateral ratio depends, and pretty much also the leverage ratios, depend on two things. What assets you bring in as collateral, and which assets you're borrowing. And not just which asset you're bringing as collateral.

• 28:23David Hoffman?

  And how are these parameters determined?

• 28:27Speaker 02

  Well, Nippon, so Nippon is, you know, pretty much owning the the the main mechanism of, you know, what parameters we offer to ensure that it's safe and also still able to offer leverage. And we have this huge Excel that we also do to make sure that we update, you know, every every week, depending on the price, and making sure that the parameters that we set is still within the the range that we are okay with.

• 28:53David Hoffman?

  Okay, would you would you characterize that as a hands-on endeavor? Is that something that is updated frequently? Or like, what is the the long-term plan for maintaining this this balance? It seems like a delicate balance that if someone isn't having like their eyeballs on it all the time, could get out of hand.

• 29:11Speaker 02

  Hmm, so technically, you don't have to look at, you know, every week. We we just do so now because we just launched V2. So we want to make sure that everything's fine, you know, as the migration process has has been going, right? And all the parameters on our V1 and V2 actually have taken into account the worst-case scenario. So let's say if there's a really huge price swing or or anything in the past that, you know, can, yeah, can can cannot really lead to a good event. That is something that we also have taken into account. And the levers that we offer pretty much ensure that, you know, if that scenario were to happen again, it would be mitigated, although we cannot say that it would not happen because

• 29:56Speaker 02

  we don't know, you know, what else is going to happen in DeFi, right?

• 30:01Ryan Sean Adams?

  So can we talk a little bit about lending on Alpha Homora? So you you could lend your ETH at least in in version one. Now in version two, you can lend all sorts of other assets. What are what are the typical interest rates? Because it was it was fairly attractive in Alpha V1 for ETH. It was something like, like, I don't know, four to eight percent, somewhere in that range? Is that about right?

• 30:24Speaker 02

  Though typically, it stays around eight percent in V1 and then goes up to like in the tens, in the twenties sometimes.

• 30:31Ryan Sean Adams?

  Wow.

• 30:32Speaker 02

  When when the the utilization rate goes really high. And and, you know, I think the key thing with that is the interest rate model that we use is a three-slope curve, and I think that works really, really well for for high utilization assets. So let's say.

• 30:50David Hoffman?

  Can we define what that is?

• 30:52Speaker 02

  Yep, so typically, there is only one kink, right? Let's say like it's here and then it's here. Um, given whatever utilization rate you want to to set the interest rate to be higher. Uh, what we do differently in V one and also going to adjust in V two as well. Right now, the V two is not three curve. Uh, three slope curve yet. So in V one is that uh, it's gonna be like this. It's gonna stable at around eighty to ninety percent utilization rate. So which means that at eighty to ninety percent. Utilization rate, the borrowers are paying fixed fee. Uh, I mean fixed borrowing APY. And it was flat at ten percent APY, ten percent borrowing APY, which correlates to about eight percent lending interest rates.

• 31:36Speaker 02

  Um, and the fact that I tell you that, you know, typically it stays at eight percent is because we want the borrowers to be at around eighty to ninety percent. Uh, because we think this is the optimal for both borrowers and lenders. Lenders get high APY without risking the funds locking without having, uh, without being able to withdraw. And then the borrowers get, you know, a fixed uh, APY uh, within this range, right? And then after uh, ninety percent, it would go up really steeply. So this gap is only ten percent from ninety to two hundred percent. Uh, so that's why when uh, the utilization rate goes beyond ninety percent, borrowers typically just. Uh, close their position because the APY to to borrow the funds are too high now.

• 32:20Speaker 02

  So yeah, with this three slope curve, um, it allows us to generate pretty high APY.

• 32:25David Hoffman?

  Okay, so the three slopes are there a a first long, slow slope where the a the the interest uh, increases. A little bit, but not that much from zero to eighty percent. And then from eighty to ninety percent, it stays flat at a relatively low. But still, well, well, not not too low, I guess, but stays flat from eighty to ninety percent utilization of the ether deposited. And then once you hit that ninety percent, it goes up really, really fast because you can't get to a hundred percent because that's bad. And so that that plateau that you create offers stability in uh, yield for the suppliers and the borrowers.

• 33:04David Hoffman?

  Uh, and and that just makes things more stable, which I that that's pretty clever. And so you're both incentivizing. Uh, you're you're incentivizing just capital efficiency. I think that's pretty elegant.

• 33:17Speaker 02

  Yeah, so, so you know, that's the, the math behind um the high APY on lenders as well. And your, your, your second question, Ryan, you're asking, you know, what's the APY on, on V2, right? There are many assets. So right now, we're migrating more of ETH and in the pools and also the lenders from V1 to V2. So the APY on ETH on V2 right now is about 5% to 6%. And then on stable coins, it's about 30%, including the alpha APY2. Yeah.

• 33:49Ryan Sean Adams?

  Wow. Okay, all right. So, so David, he, he's a bit of a DeFi Dgen, you know, not like me. So I know he's gonna, he's gonna use the borrowing side of Alpha Homora a whole bunch. But I'm a simple holder and I like yields, you know, on my stable coins, I like yield on my ETH. So I might be more interested in lending, but what I, what I'm having, what I want to understand if I'm to, to lend to something like Alpha Homora. Let, let's say I put my ETH in Alpha Homora is kind of the, the risk level, right? And so, you know, something like ETH V2 right now in, in staking, I can earn about 10%, maybe 11% smart amount.

• 34:27Ryan Sean Adams?

  Of course, my ETH is locked up, but it's a different story, but at least the risk I have there is kind of hypothetically should be protocol type risk, right?

• 34:37Ryan Sean Adams?

  Or risk that you two never, never ships. What sort of risk am I subjected to when I deposit into, into Alpha Homora as a, as a lender? And I know you mentioned some of this. I just want to wrap my head around it because I know there's smart contract risk. People are familiar with that with all DeFi protocols. What other risks? You, you also mentioned some, basically some risk on the, on the kind of the borrower side. If, if they go underwater somehow, but can you walk me through that one more time to make sure I understand what kind of risk there might be?

• 35:11Speaker 02

  Sure, so when positions are underwater, which means that debt is more than collateral that they inputted. Um, then when that case happens, then the protocol will need to find the funds from somewhere to cover that debt, right? Um, the first place that the protocol would find that fund is the insurance pool that we have, which is coming from the twenty percent of the borrowing uh interest rates that the borrowers are paying. Uh, and then once the protocol taps into that pool and if there is the need to find more funds, then it would tap into the pool of uh the lending assets um that will cover the funds.

• 35:51Speaker 02

  Um, so I think it's more of, you can treat it as the secondary uh place that the protocol will look at. Um, and only at the event in which liquidation, uh in which the positions are underwater. So in order to have a position to be underwater, that means uh debt ratio would have to reach hundred percent. And then when it hits hundred percent, no one is liquidating that position yet for a long time. Because we give quite a huge buffer, even a liquidation, which means that when positions are at liquidation, the positions are not underwater yet, um it has some room to to allow price to swing. Uh, within that room, you know, depending on how fast price swing, but within that room,

• 36:35Speaker 02

  liquidators should already come to liquidate, given the the the incentives that they get, right? But somehow if they don't come in and price keeps swinging um and position uh becomes under under underwater, um because debt keeps rising and collateral remains the same. You know, then the mechanism would be to tap into the insurance pool and then later on the lending pool.

• 37:00Ryan Sean Adams?

  Got it. Okay, so there's some backstops there and I I'm wondering like what would happen in the case of something like a a Black Thursday? That we saw, man, it seems like a very distant memory, but it was it was less than a year ago when we had sort of a a major, almost a black swan event of a pretty large eath drop in in one day. And maker, you know, keeper bots, liquidator bots had trouble keeping up um and liquidating sort of the collateral positions. Could Alpha be subjected to something like that? Um, so that too is as a risk and then also are there oracle risks involved here too?

• 37:36Speaker 02

  Yeah, actually, before I jump into into that, one thing that I forgot to mention is that on the lending lending side, this is actually similar to the other lending protocols as well, in which that your funds are are pretty much going to be subjected to the risk will be if the borrowers don't pay the debt, right? Because technically, your funds are with the borrowers, and if the borrowers don't pay, then that's a part of the funds. So that's similar to the other lending protocols. The difference is that, you know, utilization, well, not utilization, but yeah, the difference is that utilization on Alphahomar is usually higher than than than other lending protocol, just on the basis of leverage you farming product itself, right?

• 38:18Speaker 02

  So, yeah, so that's one thing to know that, you know, it's similar lending risk as you were to lend in the other protocols too. So now, back to your question with

• 38:33Speaker 02

  Back Thursday, right? Yeah, so so there are, you know, several scenarios that we try to to make sure that the parameters take into account, including Back Thursday. However, you know, we have not simulated that scenario because we cannot simulate that scenario, right? So we try to mitigate as much as possible, given the parameters, especially which which means that when it's at liquidation point, we set a huge buffer still. So that's one way to mitigate that. And another thing that is coming as well is that we are working with a number of liquidation protocols to to make sure that we not just limit to the bots or or other liquidator

• 39:17Speaker 02

  data in the space, but actually working with liquidation protocols to make sure that we have a strong backstop, you know, system. So one of the people we're talking to is B protocol. So we're trying to see how we can leverage their their their technology that they have come up with as a backstop 45 protocols and see how we can fit with the whole puzzle here.

• 39:43Ryan Sean Adams?

  That's crazy, B protocol. So I've not even explored kind of liquidator protocols, their entire protocols that are just made to liquidate. Is that right?

• 39:53Speaker 02

  Yeah, correct. So, so that's what they do. I just talked to them last week. So, um, yeah, they're, they're pretty new. So, so, um, it's, it's worth exploring, but we're also exploring on the tech side as well, um, to see if, um, if it would be, you know, easy and, and, and good to integrate.

• 40:13Ryan Sean Adams?

  David, the money robots are getting smarter. It seems like I've got one question for you, then we're going to pause for breaks and then, um, we are going to get to all of the community questions that are coming in. And, and that is like, it seems to me, Tascha, that you guys have taken an approach almost like Andre from, from, uh, Wired, from YFI, he came on, which is like, I'm just going to build the thing that I think the community needs right now. Right? So it seems like you have, I'm, I'm not sure how your team did this, but you've figured something out in DeFi that has very strong product market fit. And the reason I know this is because Alphamore is a relatively new protocol is like, how many months has it been live at this point?

• 40:56Speaker 02

  In four months.

• 40:57Ryan Sean Adams?

  Four months. Okay. Four months. And you're already locking. I looked, uh, to sometime today, close to 700,000 ETH, right? That's like 1.2 billion ETH. Like it's, it's a, it's an ETH eater. It's an ETH monster that you've created. And that to me screams of, of product market fit. I'm just curious. So how did you do it? How did you, was it just like kind of a guess that, hey, this is something that we think DeFi needs? And then you just, you know, built, built toward, toward that? Or are you DeFi users and you just like, like felt this case yourself? Or like, how did you find this product market fit so quickly?

• 41:36Speaker 02

  Yeah. So, so I think that's the key with finding and recruiting our team. Uh, we are, you know, our team are pretty much active DeFi users in the space, uh, and, and also passionate in the space. So they, they don't just work and encode and pretty much they are active users and reading Twitter, um, pretty much, you know, very To the the whole ecosystem, right? Um. So that means that all the ideas are actually coming from everyone, not just me or Nippon. Um. And we usually get various ideas from from all the engineers all the time. And pretty much once we saw and once we realized that there's a huge, you know, gap um in the ETH side, which means that there are so many ETH holders in this space.

• 42:18Speaker 02

  And if you go on um any of the place um that you can lend and and and earn the yields, the yields are really, really low. And I'm sure if you ask anyone who's holding ETH, if you want high lending interest rate, I'm sure they would say yes. So so then that, you know, gives a light bulb moment in which that we just need to find a way to innovate on the borrowing side and create an organic high lending APY on ETH. And that will give us strong um, you know, competitive edge and and a a good, you know, product market fit to begin with. And then we grow from there. Um. We did not expect that there would be B two so quickly as well. So I think everything is more on adjusting uh to what the market needs um like you mentioned.

• 42:58Ryan Sean Adams?

  Yeah, super smart because as an ETH holder, I know, and there are many of us, like, we are strong holders. We we've been through a bear market, right? And uh there there's really not much you can do to generate interest on your ETH in DeFi. I mean, the best you could do is maybe put it in a crypto bank like a Celsius or a BlockFi or something like that. But in DeFi, aside from just staking it in ETH two, there there's really not many places uh to to put it to earn some interest. And you guys have created that. I think that is a huge part of your success. So, you know, hats off. But like, were you surprised by the volume of assets under management that you accrued in four months period of time? Did that even surprise you?

• 43:36Speaker 02

  Yeah, that surprises me too. Um. And and and I think it's it's great to not ignore that light bulb moment. And I think this um gives more clarity that, you know, light bulb moments are really, really important. Um. It may not be that idea that you think at that moment, but then if you just stick to it and find an angle um that that, you know, plays with that idea, then then that should work. Um, especially if you've been in the space for quite some time. Um. I think the value of light bulb moment will become more and more valuable.

• 44:09David Hoffman?

  Yeah, just to put it into perspective for listeners, Alpha Homora is locking up, or Alpha at large, yeah, Alpha Homora is locking up 75,000 Ether, where Ave is only locking up 420,000 Ether, which is just crazy. You almost have them doubled, which is pretty cool. There are so many more things about Alpha that I want to get into, including Alpha X and this pool of funds that is backstopping Alpha Homora. And so we're going to get into all of those details right after we get back from a break to talk about some of these fantastic sponsors that make this show possible.

• 44:46David Hoffman?

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• 47:16David Hoffman?

  All right, guys, we are back with Tascha from Alpha, and we have talked all about Alpha Homora, and there are a few more things we want to talk about, and then we're going to get into some listener questions. So if you are watching on the YouTube, first off, thanks for being there. And now is the time to get your questions in. While you are doing that, don't forget to hit that like button, and we'll get to those questions in a little bit. But I want to ask about Alpha X, because Alpha X is a different product than Alpha Homora. So Tascha, can you tell us about Alpha X?

• 47:45Speaker 02

  Yeah, so it actually came from the market demand, again, that we saw, once we launched Alpha Homora, right? That demand is that they want to use leveraged farming product, they want to use Alpha Homora, but they don't want to be in a position in which they're short in ETH. You know, in to give more details on Alpha Homora V1, in which all the leverage is based on ETH. If you supply not in equal amount, and let's say... Say you you're supplying one ETH and you're borrowing one more ETH to a U farm on ETH sushi, right? Then that means that one ETH has to be converted to sushi. Um, because you still need both to provide liquidity and you farm.

• 48:27Speaker 02

  So that means that you're in a position of shorting one ETH. Uh, because uh, you're technically selling the ETH now. Uh, if the ETH price goes up, then that means you have to buy at a high price back to pay the loans, right? So when that's the case, then a lot of community members, a lot of users. Uh, reached out to us saying that, you know, is there a way to hedge their positions? They don't want to short the ETH. Um, so you know, that gives another light bulb idea that, hey, we should actually just create another product. Um, that will grow in its own area, but still provide this ability to hedge. Um, and and and provide synergy to Alpha Homora. So you know, that's how we came across the idea of of Alpha X, which is a non-order book.

• 49:11Speaker 02

  Uh, decentralized precious swap trading product. Um, that will grow in this area and still provide. Um, Alpha Homora V two users to be able to hedge their positions. Um, so when we launched Alpha X, there would be a simple UI. For users to just click hedge and then, you know, taking through the whole process and and open another another long position on Alpha X. Um, to make sure that they are both in a market neutral, leveraged position. So that's, you know, on the high level, uh, I can talk more about, you know, how Alpha X is unique from the other. Um, you know, protocols in this space and what do we look to grow Alpha X into?

• 49:52Ryan Sean Adams?

  Yeah, do that. And is it out yet or is it, when when is it coming?

• 49:56Speaker 02

  It's in private testnet right now, so we're working on uh, adjusting the parameters based on the data. That we have got um, from the private testnets. And then, you know, depending on how much we have to adjust on the parameters. Uh, or on the smart contracts, um, usually not on the on, not on the smart contract level, but more on the parameters. Um, to ensure that it's scales, um, and also safe to use. Um, and then the next step would be to launch public testnet. Um, so yeah, a bit more about Alpha X is that. You know, the fact that it's non-order book is already a good thing, which means that you don't have to bootstrap liquidity to to be able to trade on Alpha X, right?

• 50:39Speaker 02

  Another thing that is, you know, really unique about Alpha X is that, which is what I mentioned earlier, is we baked in the funding payments or funding rate payments into the price. So which means that on Alpha X, there is only one price. Whether you you you open a position, whether you close a position, that's the price you're, you know, doing it against, right? And in order for us to simplify the funding rate payments, we bake that concept in into this price. So which means, for instance, if the long were to have to pay the short, then we would shift this price down automatically. So the long would not have to pay the short, but if the long were to close a position, they would close at a lower price

• 51:24Speaker 02

  than if they were to close before the adjustment. So hence, they are paying the short indirectly by default. So that's the one main thing that's unique about Alpha X. The second thing that I really like is that the positions, the leveraged positions on Alpha X are tokenized. It's going to be wrapped into ERC 20, so which means that, you know, wherever Alpha X is, be it on Ethereum, be it on L2, which we are exploring as well. Users can still unlock that interoperability because once you port that ERC 20 out from, you know, L2 to the other

• 52:04Speaker 02

  protocols in L1, then you will be able to use more benefits and do more things with this tokenized positions.

• 52:11Ryan Sean Adams?

  Very cool. All right. Well, Tascha, you've teed us up for our first reader question here. So this is from someone in the Bankless Discord, asking about your Layer 2 strategy. So you just mentioned that Alpha is exploring it. What are you exploring? What looks good in Layer 2 and what are you planning to implement?

• 52:30Speaker 02

  Yeah, so we're actively talking to various Layer 2 protocols, looking to deploy, you know, AlphaX on Layer 2. So, so you know, this is the, the, the next step for AlphaX. We're actively evaluating various Layer 2. The fact that the positions are tokenized makes it, the, you know, makes it still possible to interoperate, interoperate with the other protocols. So that's why we decided to, you know, start first with AlphaX beyond L2. Typically, when we, when we build the products on Alpha Finance Lab, right? We don't like to have the product operate as a standalone product.

• 53:12Speaker 02

  We like to have it as an ecosystem, even with Alpha Homora, there's a huge partners and ecosystem that it, you know, partners with. With AlphaX, we're using the tokenized positions as the, the, the way to create an ecosystem for AlphaX. So yeah, depending on which L2 we're, we're going to choose, the public test net should also be on that L2 as well. So, so that will be upcoming in the near term future.

• 53:40Ryan Sean Adams?

  Natasha, do you have any like general directions as far as L2? Are you thinking more like optimistic rollups or ZK rollups or something else entirely?

• 53:49Speaker 02

  Yeah, we're, we're thinking more on the optimistic rollup. So we're actively talking to various protocols in that area.

• 53:57Ryan Sean Adams?

  Very cool. Thank you.

• 53:58David Hoffman?

  So we have a question from Carl in the Bankless YouTube about the Alpha Token. And this is a question that I have as well. What, what role does the Alpha Token play in the Alpha Finance ecosystem?

• 54:10Speaker 02

  So we actually have finalized the Alpha Tokenomics. And, and we actually have started, you know, working on the technical details, writing the smart contracts, adjusting Alpha Homora B2 to bake in that Alpha Tokenomics. So I think that's the high level that, that I wanted to share. I think another thing that is good to know now is that there are multiple. Factors in the Alpha Tokenomics. So when we create something, we don't just create from a one layer or one perspective. We try to always be more creative and innovate something that we do, right? So that's the same for Alpha Tokenomics.

• 54:54Speaker 02

  So there's, you know, one component that is, you know, similar to other protocols. And then there's another component that is also something new and creative. And we're really excited on launching a combination of both. So yeah, more details to be shared. I'll make sure to share as fast as possible when we can and make sure that we explain very thoroughly on the new idea that we have come up with.

• 55:21Ryan Sean Adams?

  Are you viewing your token as kind of part of an ecosystem as well? So one token across all of the Alpha products, is that right?

• 55:29Speaker 02

  Correct, yes.

• 55:31David Hoffman?

  And then another question that I've been seeing a lot in the Bankless YouTube comments is about that insurance fund, which I promised to come back to towards the end of this podcast. So here we are. There's an insurance fund that you guys have that is backstopping some of the activity going on in Alpha Homora. But Alpha seems to be having a, there seems to be a social contract of capital efficiency. So what else is this insurance fund going to be used for? Is this going to be tapped into in any other sorts of ways in the future?

• 55:58Speaker 02

  Yeah, actually, it's gonna be related to the Alpha Tokenomics. So that should be.

• 56:04Ryan Sean Adams?

  Spoiler, spoiler alert.

• 56:07Ryan Sean Adams?

  Nice, David. Well done. Very good. Another question came in on Twitter, and this was, I think, from a developer. So would love to understand Alpha's plans to allow developers to build on Alpha. You've mentioned in the past, Tascha, that there was this possibility. So any thoughts on timing, what you'd like people to build? And the person is asking because he is one of the people who actually wants to build on Alpha. So what can you tell developers about building on Alpha at this point?

• 56:42Speaker 02

  Yeah, so I, I think at this point, um, you know, myself and, and the team, uh, we have to grow the community initiatives a lot more, including, you know, more grants, uh, more, um, growing the developer mind share for the whole ecosystem. So that's, uh, in progress. Um, and, and pretty much, you know, in the meantime, as that's being grown out, uh, if you have any particular idea you want to build on top of Alpha Homora, on top of Alpha X, or any other, any other upcoming Alpha product, feel free to reach out directly to me on Discord, although I reply a little bit slow. Um, um, but you know, I reply, uh, so, so just DM me, um, and with ideas or anything like that.

• 57:24Speaker 02

  Um, for the long-term solution, you know, we're going to build out more of a decentralized grants, um, then, and pretty much allowing developers in the space to be able to contribute and be able to have a say on what should be built, um, on Alpha products.

• 57:41David Hoffman?

  You guys did get praised so far in these YouTube comments from someone. I remember reading a comment about how attentive and, and, uh, patient some of the explanations out of the, your guys' Discord was. So, uh, the Discord, uh, is the community gathering place for so many of these protocols. So having a good one is really important. So, so nice job there. Another question that we have out of the YouTube is, are there any teas, teasers on what pools they are looking to add to the four that they currently have available in, uh, V2 already?

• 58:10Speaker 02

  Yeah, so more pools are upcoming. Um, a bit teaser just for Bangless, uh, listeners and an audience are, you know, ETH, Wi-Fi is coming. Uh, you would also be able to take a leverage on Wi-Fi. So that also means that users can lend Wi-Fi as well. So there would be an IB Wi-Fi token generating high yields on Wi-Fi. Um, and then the same mindset will grow to, you know, other assets like DPI, SNX, and so on and so forth.

• 58:42David Hoffman?

  IB Wi-Fi. Wow, that sounds, that sounds crazy.

• 58:48Ryan Sean Adams?

  There you go, Bankless. There's some Alpha leaks on our Alpha conversation. Yeah, had to fit that one in, David. You know how it's going there. Another question coming in from Bankless Discord this time is actually about your partnership with Wyarn. So what has Alpha gained from partnering with Wyarn up to this point?

• 59:11Speaker 02

  So I think a lot of times, you know, the gains are more long-term and relationship building. And I think we're here for the long-term perspective, right? So sometimes the gains are not quantified to, oh, we get X amount of loans or X amount of, you know, lending assets on the product. But I think it's the relationship that we have built in a sense that whatever we do, we will try to benefit the partners and same for the partners. Whatever they do, they will try to be wary of us and make sure it's something beneficial to us. So that's on the long-term, right? On the short-term, Andre and Urn itself actually have been lending through Alpha Homora V2 as well.

• 59:54Speaker 02

  So to give more color on that, you know, the Urn V2, DAI and USDC vaults, these are lending on Alpha Homora right now to pretty much grow the liquidity pool of lending assets for the leveraged farmers to take the leverage on. So that's on the short-term and, you know, once we find more angles that we can work together, and then it will grow from there. And, you know, we're using cream as the liquidity place that we take the liquidity from to allow leverage users to take leverage, right? So cream is also a part of your ecosystem and integrating with cream also helps grow the ecosystem too.

• 1:00:36Ryan Sean Adams?

  Oh, curious. So why cream?

• 1:00:39Speaker 02

  I think because of several things. I think when we were building Alpha Homora V2, Cream was at the injection point in which Urn just acquired or like, you know, yeah, acquired Cream. So they were up for a new change, right? And I think in order for a lending protocol to allow Alpha Homora and pretty much whitelist Alpha Homora contract, they themselves have to adjust their contract to. So Cream would have to, you know, adjust on their code, saying that they would whitelist Alpha Homora V2 and allow Alpha Homora V2 to borrow in an under collateralized way. And Cream was up for that because it's at an injection point.

• 1:01:23Speaker 02

  And we are also close to Andre to begin with. So, you know, it's kind of like, pretty easy to talk to. And I think he has a lot of good ideas to pretty much find a way to grow Alpha and Urn ecosystem as a whole.

• 1:01:38Ryan Sean Adams?

  Okay, a Bankless member is asking about the harvest function on V2 and said that the cost is $500 in gas at 100 Gua. Why is it not optimized better? Do you guys have any plans to continue to optimize gas costs in Alpha Homora V2?

• 1:02:00Speaker 02

  Yeah, I think several points to that, right? First point is that Alpha Homora does a number of operations for the users. The more complex your strategy is, the more gas cost it's gonna cost. So what determines complex strategy, right? So let's say if you are supplying only DAI to the Curve 3 pool and you are borrowing, you know, 75% USDP, 10% DAI, 10% USDC. So it's pretty complex. Then that means that all of these have to be gone through a number of operations to make sure that you provide liquidity in, you know, same proportion on Curve, which already has pretty high gas to begin with, comparing to other AMM protocols,

• 1:02:47Speaker 02

  to get the CRV token. So to prevent, you know, high gas costs, one way to do it is to simplify the operations on the user's end. On our end, though, there there are several things that we're looking to do as well. Uh, one thing is, um, you know, we understand that claiming the farm token can cost a lot, uh, especially now when the gas cost is really, really high. Um, so, and there have been a lot of committee members wanting to to put up a proposal, um, to to create another option, um, to reinvest. Um, so that is something that we're into as well for users who who, uh, don't want to pay high gas fees

• 1:03:29Speaker 02

  and they want to claim, um, the rewards, they could be able to choose the reinvest button. Uh, it's still to be determined, the committee members would still have to put up the proposal, um, and and and evaluating through, um, the the risk parameters as well.

• 1:03:45Ryan Sean Adams?

  Another question, uh, that came in was about, so Synthetics recently launched synthetic stocks, uh, starting with Tesla, so S Tesla, everyone's favorite in crypto these days. Does Alpha plan to incorporate any of these assets? The idea of a trustless decentralized kind of synthetic stock is pretty appealing, especially in the US when, uh, exchanges like Robinhood are are shutting down our GameStop stocks. Any plans around this?

• 1:04:15Speaker 02

  Wow, you're actually leading me, uh, into more Alpha leagues.

• 1:04:19Ryan Sean Adams?

  Oh, okay.

• 1:04:20David Hoffman?

  This is what our jobs are for.

• 1:04:24Ryan Sean Adams?

  Found one.

• 1:04:26Speaker 02

  Yeah, so so, you know, that's something in our radar, um, and we're working towards it. So would not say it's not gonna happen, but also don't want to commit on any timeline.

• 1:04:39Ryan Sean Adams?

  Would that be like a separate, um, product in your ecosystem, do you think? Or would that be kind of something that could be incorporated into the two existing products?

• 1:04:47Speaker 02

  Uh, more on the incorporating into the existing.

• 1:04:51Ryan Sean Adams?

  Very cool, very interesting.

• 1:04:53David Hoffman?

  So a lot of what we're talking about is especially with AlphaMora, AlphaX partnership with Andre and Urn and all that stuff, that's all on-chain stuff. And so I have a question on the Bankless YouTube about what are you driving, doing to drive usage on the social side of things, the human side of things? Like, is there a marketing department? Is there a business development? What's that side of things like?

• 1:05:16Speaker 02

  Good question. I think that's, that's very important. And typically, you know, we just focus, you know, a lot on the product, understanding of product and everything. Yeah, we have a marketing and business development department. And pretty much the way that we work with our partners is even if there's nothing that we can do together yet, we still would like to get in touch early in case there's anything that we can do for other Alpha products, right? Because we're always going to be thinking of new products, new, new solutions to the space. So the more we know, the better. So we can see, you know, oh, this product would actually benefit this partner, and we can work together on, you know, this new product. So, so that's been, you know, pretty

• 1:06:00Speaker 02

  ongoing and actively driven by the BD and marketing team.

• 1:06:06Ryan Sean Adams?

  Tascha, this has been a fantastic conversation. I learned so much. This has been an AMA that, you know, I personally probably learned the most out of, of any AMAs that we've done previously. So thank you for that. You guys have built a phenomenal product with some great product market fit. And you're doing a great job. So, so well done. And thanks for joining us on Bankless.

• 1:06:30Speaker 02

  Thank you so much, David, Ryan, and everyone in the Bankless community.

• 1:06:34David Hoffman?

  And, and Tascha, if, if anyone listening, any of the listeners on the YouTube or listeners on the podcast want to go learn more about Alpha, where should they go? How can they join your guys' community?

• 1:06:43Speaker 02

  Yeah. So first place is you can go to the website. The website has everything, link to Discord, link to Twitter, Telegram, link to all the blog posts that we write, all the documents. So, you know, everything is aggregated on the website. So it's alphafinance.io. And then you can go anywhere in our community from there.

• 1:07:03Ryan Sean Adams?

  Well, fantastic. Well, Bankless Nation, this has been another AMA. One thing we want to tell you before we let you go, there is a consensus conference that is coming, May 24th. I will be there. David will be there. We just learned that Ray Dalio will be there, and if you sign up now, you can get $20 off that conference. Definitely check that out if that's something you're interested in. Way more fun to attend crypto conferences during the bull market. We are definitely in a bull market for the ages. So, so check that out. Tascha, thanks again for being with us. Of course, risks and disclaimers, everyone. ETH is risky, so is DeFi, so is Bitcoin.

• 1:07:45Ryan Sean Adams?

  We didn't talk much about Bitcoin these days, but we did talk about how to put your ETH into Alpha Homora. And be careful, of course, you could lose what you put in. None of this has been financial advice, but this is the frontier. It's not for everyone, but we're glad you're with us on Bankless today. Thanks a lot.

• 1:08:02David Hoffman?

  And if you are on the Bankless YouTube, make sure we get Tascha and Alpha to the front page by liking the video and also subscribing to the channel for future AMAs and all the future content that comes out of the Bankless YouTube. Thanks, guys.