Alpaca Finance 2.0 Launch Details
Dear alpacas,
The wait is over. Alpaca Finance 2.0 has arrived!
AF2.0 represents a major upgrade to our protocol and brings with it many new features and flexibility for future upgradability. AF2.0 has two major components, Money Market and Leveraged Farming, which will be released sequentially. The Money Market, which is the foundation on which other leveraged products will be built upon, is the first of many future products that will go live over the coming months.
Read on for details…
🚀Launch Plan
Alpaca Finance 2.0 Money Market will launch on Thur, 27th April 2023 with the following sequences.
Beta (soft) launch phase
Similar to how we launched AlPerp, we will also have a beta phase for AF2.0, which will run for 2 weeks (April 27th — May 10th.) This period will give our users a chance to try out the product and for our team to work on feedback and make any necessary changes before the full-scale launch.
The following functionalities will be available at launch:
- Lending: Deposit supported assets to earn yields
- Tier system of lending assets for better risk management
- Over-collateralized borrowing of supported assets
- Cross-margin on both collateral and borrowing in lending
- Multiple sub-accounts per wallet
- Earn ALPACA incentive rewards from lending and borrowing activities (see below for more details)
Money markets open for deposit: 27 April, 10.00 AM UTC
Users will be able to start depositing / borrowing assets in the supported markets.
ALPACA emissions start: 27 April, 11.00 AM UTC
ALPACA rewards emissions will begin approximately 1 hour after we open the Money Markets pools. We’ve made AF2.0 more convenient, where you will no longer need to do any manual staking to earn ALPACA rewards. By depositing and/or borrowing, your rewards will be tracked automatically. As usual, you can claim ALPACA rewards any time with immediate liquidity.
Note: The beta phase will have a lower emissions rate, which will then increase at the start of the full-scale launch in week #3.
Supported Assets
During the beta phase, we will support the following assets
- BNB (Collateral Tier)
- BTCB (Collateral Tier)
- ETH (Collateral Tier)
- USDT (Collateral Tier)
- BUSD (Collateral Tier)
- USDC (Collateral Tier)
With the full scale launch, these are some planned assets that will be added over time. This list is not exhaustive, and we will list more assets in partnership with other protocols through an updated Grazing Range program as well
- TUSD (Collateral Tier)
- BETH (Collateral Tier)
- LTC (Collateral Tier)
- CAKE (Collateral Tier)
- XRP (Collateral Tier)
- ADA (Collateral Tier)
- DOT (Collateral Tier)
- FTM (Cross Tier)
- MATIC (Cross Tier)
- LINK (Cross Tier)
- UNI (Cross Tier)
- DOGE (Cross Tier)
- SHIB (Cross Tier)
- …
💸Reward Details
A total of 900k ALPACA (~$240k) will be distributed to lenders and borrowers over a 12-week period.
Rewards Start Date: 27 April 2023 11.00 AM UTC
- Week#1 — Week#2: 20,000 ALPACA / week
- Week#3 — Week#12: 86,000 ALPACA / week
We will use a point allocation system to distribute ALPACA rewards, similar to how ALPACA incentives were distributed to lenders and leveraged yield farmers in AF1.0.
For example, during week#1, if allocation points for USDT lenders = 100 and the total points in the system = 1,050. BNB lenders would then get 9.5% of the total ALPACA allocated for that week = 20k * 9.5% = 1.9k ALPACA.
For specific point allocation details, please refer to the table below:
Note: Allocation points for other assets will be shared at a later date as they are listed.
Protocol Parameters & Revenue Distribution
We list key parameters for the AF2.0 money market, and where relevant, how the protocol revenue will be distributed.
Lending Performance Fees = 19%
The lending performance fee will be distributed as followed:
- 6% towards Governance Vault
- 4% towards Buyback & Burn
- 9% towards dev fund
Close Factor = 50%
Close factor refers to the maximum amount of outstanding debt that can be repaid in a single transaction by a repurchaser / liquidator. It is set to 50%.
Repurchasing Bonus to repurchaser = 5%
Repurchaser will receive a 5% bonus on the collateral asset value when executing a repurchasing transaction. You can see an example calculation here.
Note: Anyone can become a repurchaser. No whitelisting is required. please refer to the document here for details on how to execute a repurchasing transaction.
Protocol Repurchasing Fee = 5%
Fee% taken by the protocol from a repurchasing transaction. 100% will go towards buyback and burn. You can see an example calculation here.
Asset-specific Parameters
Below are the asset-specific parameters. For their specific values, please refer to our Docs.
- Collateral Factor: the value of a borrower’s collateral is weighed downwards based on the specific collateral asset’s risk-profile, as defined by the Collateral Factor.
- Borrow Factor: the value of a borrower’s liability is weighed upwards based on the specific borrowed asset’s risk-profile, as defined by the Borrow Factor.
- Interest model: for the over collateralized lending use case, we will employ double slope interest models. Please refer our docs for a specific model for each asset.
- Max Collateral Cap: the maximum collateral amount that will be accepted.
- Max Borrow Cap: the maximum amount of assets that can be borrowed.
🔐Security
Security continues to be the top priority for every product we launch. The AF2.0 smart contracts have been reviewed extensively through our internal code review process. It has also passed an audit by Inspex which has performed many audits for us in the past. You can view the final audit report here.
🚶Next Steps
With the launch of AF2.0 MM, a very strong foundation layer is set for Alpaca Finance’s future products–namely the next-gen AVs, leveraged yield farming, and other enhanced yield generating products.
Given the recent rise of Concentrated Liquidity (CL) DEX models after UNIv3 business license expiration, we know many of you are eager to learn the details of how Alpaca Finance leveraged yield farming products will adjust to this new development.
Integrating with CL DEXs is a topic our team has researched, discussed and debated in length over many months trying to come up with what we believe will be the best solution for users and path of growth for Alpaca. The development work has been underway, and you can expect an article next week that will explain our thought process, what AVs and LYF under the new CL DEX model will look like, the current progress, and upcoming timeline.
