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Introducing Homora V2 on Avalanche - YouTube
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[Music]
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hello and welcome back it's great to
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have you here i'm really excited to
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share what we have prepared for you in
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this video
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when we first introduced alpha homura to
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the world to define what leverage your
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farming is
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soon enough we launched alfa homura v2
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with beta technology and functionalities
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on ethereum blockchain
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with this technology it offers users the
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most innovative yield farming process by
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today and now we are bringing this
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innovation the original and ultimate
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leverage your farming product to the
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avalanche community
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so what is alpha homura v2
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to answer this question let's begin
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where it all started liquidity providers
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a liquidity provider or some may know it
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as a market maker is someone who
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provides the crypto assets to a dex
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protocol to help create a decentralized
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form of trading
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in return these liquidity providers are
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given two things
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the lp tokens that represent the
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liquidity providers share of the pool
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and the portion of the trading fees paid
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by those who trade against this
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liquidity pool
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for instance imagine providing usdt.e
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and avox to the usdt.e avox liquidity
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pool on trader joe
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today users can earn up to 20.7 apr from
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the fees generated by the trade and lp
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tokens representing that share of the
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pool
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to incentivize users to provide
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liquidity dex protocols give additional
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incentives called your farming rewards
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for users to provide liquidity
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so being a yield farmer they can earn
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more rewards by staking their lp tokens
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to earn your farming rewards hence it is
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called year farming with lp tokens
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on trader joe users can earn up to sixty
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five point five percent apr from staking
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the lp token of usdt dot e slash avox
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pool today
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as a result your farmers get eighty six
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point two percent apr by combining 20.7
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trading fees and 65.5 yield farming
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rewards this scheme of earning passive
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income on dex protocol is a well-known
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and widely used method among crypto
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farmers but what is still lacking in the
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current landscape is the ability to
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exceed the cap of apr or apy set by the
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dex protocols
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referring to the previous example this
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is when if yield farmers invest more
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capital in the yield farming position
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their apr was still maximized at 86.2
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apr we know this limitation and hence
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tackle it down for our users alpha
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homura v2 gives crypto farmers the
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ability to exceed the max apr or apy
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through leveraging
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you see
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the innovative side of leverage your
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farming on alpha hamara v2 allows crypto
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farmers to combine their yield farming
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tokens with borrowed assets into
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collateral
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so users can earn even higher apr or apy
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exceeding the limit set by dex protocols
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for instance you can supply 100 of
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usdt.e
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and borrow 200 of avox and usdt.e
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therefore by combining both assets you
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will have a total of 300
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of collateral assets
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this is then used to leverage your farms
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in which the reward is the return on
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three hundred dollars translating into
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three x of the original apr or apy
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looking at trader joe with eighty six
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point two percent apr on usdt dot e
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slash avox pool
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by leverage you're farming on this pool
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through alpha amura v2 you can earn more
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such that 3x on 86.2 percent apr is even
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possible
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alpha homura v2 also acknowledges the
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difference between volatile and stable
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assets
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this is why we create the groundbreaking
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collateral and borrowing credit concept
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that has never been done elsewhere
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allowing users to take high leverage
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with high safety
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for instance the fertility of the
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supplying token decides how much you can
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borrow
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such that user a supplying a stable coin
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like usdt.e and borrowing a volatile
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asset like avax would be able to borrow
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less amount of avox than if he were to
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supply avox instead of usdt.e
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despite this amazing opportunity we give
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our users their risk that needs to be
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acknowledged as well
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these are impermanent loss liquidation
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and price slippage
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since leverage your farmers are also
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liquidity providers the risk that comes
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with liquidity providing also exist here
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the risk is called impermanent loss risk
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this is when the price of one token
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inside the liquidity providing position
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increases in price in comparison to
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another token
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or one token decreases in price in
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comparison to another token in your
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liquidity providing position
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the larger the change the more exposed
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you become to impermanent loss which
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means less valuable asset at the time of
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withdrawal than at the time of deposit
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in addition as leverage your farming
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involves borrowing assets the risk of
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liquidation is a possibility
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this is when the value of the collateral
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asset is less than the value of the
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borrowed assets
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for alphamora v2 the lp token for
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liquidity providing is actually the
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collateral
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for instance since the price of your
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assets inside the liquidity providing
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position can change due to the price
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fluctuation therefore when the value of
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your total liquidity providing position
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decreases to a certain threshold or a
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position that has a small buffer between
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your collateral value and power value
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this allows liquidation to take place
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alpha homura v2 gives users ease with
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automating the swap mechanisms
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hence your farmers don't need to have an
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equal amount of both tokens in order to
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start your farming
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when users want to open a leveraged
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yield farming position they can just
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supply a type of token and alpha homura
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v2 will automatically and optimally swap
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the asset to arrive at an equal value of
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both tokens before taking care of the
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year farming process for our users
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this can be easily achieved through the
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basic farming mode
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however users may face some risk of
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price slippage if they choose to commit
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advanced farming mode in this mode alpha
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homura v2 allows users to borrow
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multiple assets which users can decide
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how many percentage shares they want
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their borrowed assets to be in
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if chosen not ideally the price slippage
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can be too high
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for instance a user wants to supply 1
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million avocks to the gel avox pool you
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can choose to borrow only avox tokens
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only joe token or a combination of both
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in this case the problem arises when
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this users let's say decides to borrow 1
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million avox to achieve 2x hence
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requiring 1 million of avox to be
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swapped into joe
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resulting in a high slippage trade since
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the dex protocol that the yield farming
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action is taking place on requires
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liquidity to be provided for both two
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tokens instead of one
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regardless with risk come solutions 2
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there are ways that users can protect
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their assets from the risk mentioned
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earlier we have prepared you with the
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following solutions
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to protect you from impermanent loss we
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recommend that users should open
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leverage your farming positions on pools
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with tokens that that price move in
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correlation with one another the less
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difference in asset ratio the less
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impermanent loss users face
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therefore opening stablecoins pool like
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usdc.e
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usdt.e would face limited implemented
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loss
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or if you see that avox moves in
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correlation to eve then opening
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opposition on rap eve dot e slash avax
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can bear less impermanent loss than
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another position of usdt.e slash avax in
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which avax definitely does not move in
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correlation to usbt.e since usdt.e is
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stable at one dollar
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liquidation can be prevented by making
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sure that the value of collateral assets
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is higher than the value of borrowed
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assets
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to make this happen users can supply
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more assets to the position hence
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increasing your position in lp token and
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increasing collateral
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or repaying the borrowed assets hence
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decreasing your leverage
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lastly to have lower price slippage
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while maintaining a high leverage level
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users can commit to a basic farming mode
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so that the app can automatically and
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optimally choose borrowed assets and
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proportions that minimize trading
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slippage for you
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however if you choose to use the
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advanced farming mode the price of the
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page can be minimized as well but
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requires an in-depth understanding of
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how next protocols and liquidity
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providing work
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with the powerful leveraged yield
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farming mechanism and the automatic
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interface alpha homura v2 not only
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redefines what year farming can be but
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how it can become
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welcome to alpha homura v2 on avalanche
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