Introducing xALPHA
We’re excited to launch our newest xAsset xALPHA, built on top of one of the most dynamic protocols in the space, Alpha Finance. Alpha burst onto the DeFi scene a year ago and has since become the leader in leveraged yield farming. Looking forward, their new product offering — AlphaX — is set to shake up the market for on-chain perpetual trading.
At xToken, we’re especially interested in Alpha Tokenomics, Alpha’s staking module for earning protocol fees and Launchpad tokens. While Alpha staking is user-friendly, xALPHA can provide additional value in several ways:
- Instant Liquidity
- Liquid Collateral
- Automatic Reinvestment
- Tax Efficiency
- Access to Lending
Instant Liquidity
ALPHA stakers currently need to wait 30 days before being able to unlock their tokens from the Alpha Tokenomics contract. In contrast, xALPHA has no lockup period. Investors can redeem when they’d like.
We’ll be targeting 5% of tokens to be unstaked and available as redemption liquidity at all times. Additionally, we’ll be staggering unlocks in order to have new redemption liquidity accessible every week.
However, there will be times when there is no direct redemption liquidity available on the contract. For this reason, we’ll be incentivizing a secondary liquidity pool for ALPHA/xALPHA using our xAssetCLR Uniswap V3 exchange framework. As such, xALPHA holders will be able to jump in and out in one Uniswap transaction.
More info down below on how to participate in our xALPHA liquidity incentives.
Liquid Collateral
All xAssets including xALPHA offer holders “liquid collateral.” This means that, when you mint on xToken, you received a yield-generating “IOU” token (xALPHA) that can be transferred from wallet to wallet, traded on a DEX or used as collateral. As opposed to locking your investment and leaving it inaccessible until you unstake, xALPHA allows you to do whatever you want with your yield-earning staked position.
Automatic Reinvestment
Alpha recently introduced its Launchpad program, where the protocol incubates other projects and then offers a share of these tokens to ALPHA stakers. While we are bullish on Alpha-incubated projects, it’s difficult to run a staking pool with many different assets. Additionally, distributing these tokens manually to xALPHA holders would require the team to maintain off-chain logic and may not be gas-effective for smaller holders. For that reason, we’ll be periodically reinvesting token distributions back into ALPHA in order to compound rewards.
Tax Efficiency
While Launchpad distributions would qualify as normal taxable income for direct stakers, xALPHA abstracts the distribution and reinvestment process into an ERC20 wrapper, requiring no additional taxable transactions from the investor. We’ll be reinvesting distributions into ALPHA, allowing holders to efficiently compound their gains.
Access to Lending
The launch of xToken Lending is fast approaching. “xLend” is our internal lending solution for our yield-generating xAssets. Users can deposit an xAsset like xALPHA as collateral and borrow USDC. This is the best of both worlds with no opportunity cost. Instead of locking your non-yield-earning ALPHA as collateral on an alternative lending platform, you will soon be able to lock your yield-earning xALPHA on xLend and borrow against it.
xAssetCLR Incentives Program
After the successful launch of our first two xAssetCLR pools — xAAVEa-AAVE and XTK-WETH — we’re excited to continue deploying new CLR pools for our xAsset pairs. If you’re unfamiliar with xAssetCLR, our specialized exchange framework for Uniswap V3, check out this blog post we wrote explaining the benefits and mechanics of the contract.
We’ll be incentivizing an xALPHAa-ALPHA pool for a minimum of 10 weeks at a rate of 80k XTK per week. For our How-To for participating in CLR pools, see our guide here. We know there is a 30 day lockup period for those who are unstaking their ALPHA to mint xALPHA. We fully intend to extend this 10 week rewards program to ensure that it’s worth it for later entrants.
Lastly, while we are excited about the utility of xAssetCLR, we recognize that providing liquidity to CLR pools and staking LP tokens for rewards requires too many transactions. We’re currently working on a streamlined version of our CLR+StakingRewards contracts that will cut several transactions from the flow and reduce gas substantially.
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