After a difficult first quarter, decentralized financial platform (DeFi) Alpha Homora today announced the relaunch of its v2 program for leveraged yield farming – and so far both traders and users are celebrating as both Total Value Locked (TVL) and for ALPHA tokens increase.
Version 2 of the platform, which enables up to 7x leverage on popular revenue positions in protocols such as Sushi, Curve and Balancer, had to be scaled down to new positions in particular after a devastating hack in February. Protocol suffered $ 37 million in losses in what is considered to be one of the most devastating exploits in DeFi history.
However, the relaunch to date has been floating after several key figures. The ALPHA token, which underwent a revised token economy design during the downtime, rose 11.1% to $ 2.28 that day, and TVL has increased nearly $ 100 million to a total of $ 675 million since the relaunch gone up.
# AlphaHomoraV2 now has …
$ 675 million TVL
$ 500 million on loan
$ 170 million in collateral
$ 99 million loaned
Although there is a high demand for the product to be used, we will maintain the security measure we have taken by maintaining a $ 100 million credit limit for the time being.
Will actively monitor and increase accordingly
– Alpha Finance Lab (@AlphaFinanceLab) May 13, 2021
It remains to be seen how long the log will remain stable. In addition to the February exploit, the platform was tied to a $ 11 million loss from Rari Capital earlier this week, although that particular exploit was not due to any mistake by Alpha Finance Lab.
The restarted v2 also came with a number of new audits. Ultimately, however, the greatest test of a DeFi protocol is time. The longer it survives the examination by potential exploiters, the more users can rely on its longevity.
Some observers are also put off by Alpha’s unusual model, which has little precedent in Tradfi. Leo Cheng from C.R.E.A.M. In an interview with Cointelegraph, Finance, whose log-to-log lending platform enables Iron Bank to leverage v2 leveraged yield farming, argued that leveraged lending is a logical next step if flash lending can be a key element of DeFi’s capital efficiency.
According to Cheng, a smart contract “naturally doesn’t care and doesn’t quite see the boundaries with smart contract projects” as to where the funds come from. As long as a transaction ends with the various protocols involved in the green, the transaction will run through.
Alpha Finance Labs did not respond to multiple requests for comment.