Alfprotocol is in fact a group of protocols created to provide decentralized capital between and between investors and traders in order to maximize the provision of leverage and non-leverage liquidity.
The protocol will provide un-leveraged products in the form of AlfMM (a decentralized exchange service) and AAlf (an over-collateralized credit service). On the other hand, leveraged liquidity is handled through one of Alfprotocol’s modules which communicates with external protocols such as Solaris, Jet Protocol and others that are expected to be added in the future to provide leveraged products up to 200x.
Solana enables a decentralized high leverage effect
High leverage positions have always been a problem with other protocols that depended on Ethereum’s “Proof-of-Work” (PoW) blockchain to operate. Solana supports the handling of high leverage positions due to its robust properties, namely transaction volume per second, which significantly shortens the transaction time (response time) compared to the Ethereum network.
The fast response time of the Solana Alfprotocol will enable it to process the liquidation of positions in a timely manner in order to securely cover the liquidity provider’s assets with its allocated interest. Solana’s lightning-fast latency, 27.5 times faster than Ethereum’s, creates a safer protocol for investors and the entire system that depends on timely liquidation events should they occur, especially in higher leverage cases. Ethereum’s network can also pose a risk to investors and traders when congested, as transaction fees and time expenditure skyrocket, reaching in some cases $ 400 per transaction.
Solana is a better choice when it comes to high leverage liquidity arrangements
Since the profitability of high leverage liquidity arrangements depends solely on two factors, the volatility of the assets and the response time of the liquidation unhealthy position protocol, it is imperative that the blockchain properties are a major factor in deciding which blockchain will be most efficient is . With this in mind, Solana processes 59,000 transactions per second (tps) compared to the 17 transactions per second of Ethereum and the 250 transactions per second of Cardano, making it meet today’s needs and the potential needs of future needs.
Alfprotocol’s potential lies in its diversity and flexibility to meet the needs of all traders and investors in a decentralized environment with the security and protection offered by the Solana blockchain.
Alfprotokoll is currently under development. For more information about the project and to keep up to date with the current progress of the project, please visit the website and read the white paper.