Solana has been a game-changing blockchain network in the cryptocurrency ecosystem. So far, It has proven itself formidable competition against Ethereum and other L1 solutions. Areas where Solana has shown strength include transaction fees and speed which are major factors affecting performance.
The blockchain has onboarded another protocol, Alfprotocol that provides traders with the opportunity to use leverage in yield farming by providing leveraged and non-leveraged products that would suit both new and experienced traders in a decentralized ecosystem.
Built on the Solana network, Alfprotocol is a much sought-after platform for leveraged yield farming. Like in trading, leveraged yield farming allows its users to maximize profit.
Alfprotocol Unleveraged Liquidity Pools
There are two main packages offered by Alfprotocol for the unleveraged pools, namely:
- AlfMM – This is an Autonomous Market Marker (AMM) Decentralised Exchange (DEX). This package is capable of relocating unused liquidity to the leveraged protocol and uses the AMM side order execution in achieving a bi-directional integration between the AMM and The Treasury. This further allows the AMM to act as a source for the order flow while breaking down the operations to acquire the best price option between the AMM and Serum thus giving it a DEX aggregator property.
- AAlf – Allotment Alf is a money market solution that uses a single-asset pool for liquidity providers (LPs) and overcollateralized debt positions for borrowers. In this package, pools are controlled individually, with each pool asset acting as a base for computing pool utilization and interest rates.
Alfprotocol Leveraged Liquidity Pool
This is a leverage feature that allows traders to enter positions with leverage on the Solana blockchain. Using the connectors module with business logic, the protocol enters leverage positions outside the protocol serum for achieving the highest APY and efficiency in capital provision. Moreso, in ensuring sound and sustainable liquidation, “The Treasury” module will track the position’s health at all times by tokenizing a part of the collateral and debt representations made in lockboxes that are linked with an oracle.
Lockboxes are the main technical solutions for leveraged position and collateral tracking. These are made use of within the leveraged protocol by wrapping fungible tokens. Alfprotocol users can utilize multiple lockboxes as collateral for a single position. The protocol is still in development and when complete is expected to take Solana steps higher than its competitor networks.