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With a promising relaunch, the leveraged yield farming protocol hopes to leave several missteps behind it.
Following a rocky first year, decentralised finance (DeFi) network Alpha Homora revealed today the relaunch of its v2 leveraged yield farming software — and so far, both traders and consumers are cheering as total value locked (TVL) and ALPHA token values skyrocket.
After a crippling hack in February, the platform’s version 2, which allows for leveraging of up to 7x on common yield farming positions on protocols such as Sushi, Curve, and Balancer, was forced to close to new positions. The protocol lost $37 million as a result of one of the most crippling exploits in DeFi history.
However, by all accounts, the relaunch has been a success. The ALPHA coin, which underwent a tokeneconomic redesign after the downtime, is up 11.1 percent to $2.28 on the day, and TVL has risen by almost $100 million to a total of $675 million since the relaunch.
#AlphaHomoraV2 now has…
👉 $675M TVL
👉 $500M lent
👉 $170M collateral
👉 $99M borrowed
Though the demand to use the product is high, we’ll maintain security measure that we set out to do by keeping $100M credit limit for now.
Will actively monitor & increase accordingly
— Alpha Finance Lab (@AlphaFinanceLab) May 13, 2021
It is now unknown how long the protocol will stay intact. Aside from the February exploit, the network was linked to Rari Capital’s $11 million loss earlier this week, but that particular exploit was not the responsibility of Alpha Finance Lab.
The relaunched v2 has included a new series of audits, but time is essentially the best measure of a DeFi protocol — the more it has endured criticism from would-be exploiters, the more consumers will believe its longevity.
Some analysts are also turned off by Alpha’s unconventional paradigm, which has no basis in Tradfi. In an interview with Cointelegraph, Leo Cheng of C.R.E.A.M. Finance, whose Iron Bank protocol-to-protocol lending network enables v2’s leveraged yield farming, argued that if flash loans can be a core cog in DeFi’s capital performance, leveraged lending is a reasonable next step.
A smart contract, by definition, “doesn’t quite care, and it doesn’t quite see the borders with the smart contract projects” in terms of where funds are coming from, according to Cheng. The transaction will be completed as long as the different protocols involved in the transaction are in the green.
Tascha Panpan, co-founder, said in a statement that she believes the protocol has the potential to become a well-established DeFi money lego.
“Alph Homora is Alpha Finance Lab’s first product and DeFi’s first leveraged yield farming product. Through a number of unique and useful functionalities built-in on Alpha Homora v2, the product will further establish itself as the go-to leveraged yield farming/liquidity providing and lending protocol in DeFi.”