Protocol users

Users can participate in Alpha Homora as Yield Farmers, BNB Lenders, Liquidators, and Bounty Hunters.

Yield Farmers

CAN FARM WITH ONE TOKEN: Once users select a pool, users can farm with just one token. For instance, if users select BNB-BUSD pool, users can farm by just supplying BNB. Alpha Homora will automatically and optimally swap the tokens to make sure users have equal value of both BNB and BUSD to supply to BNB-BUSD pool on PancakeSwap.

UP TO 3.0x LEVERAGE: Users can borrow BNB with up to 3.0x leverage to yield farm on supported leveraged yield farming pool to earn higher trading fees APY and farming APY.

AUTO STAKING: Alpha Homora will automatically stake LP token to get farmed tokens for users. For instance, Alpha Homora will stake PancakeSwap's BNB-BUSD LP token to farm CAKE for you.

AUTO REINVEST: All the farmed tokens will be automatically converted to add onto users' positions every 24 hours or will be automatically reinvested when reinvestor takes action. This makes sure all yields are reinvested to further maximize user's profit.

HIGH DEBT RATIO SOLVENCY: Position stays solvent as long as the debt is worth less than killFactor of the position value. Liquidation takes place when debt ratio exceeds the killFactor . Please monitor your position closely and refill/close when your 'Kill Buffer' is in the red zone.

ADJUSTABLE POSITIONS: Users can at any time choose to add more BNB or another token. Note that users cannot withdraw some without having to close a position with the current design.

Here is an example scenario for yield farmer Alice :

  1. Alice has 100 BNB and wants to farm CAKE on BNB-BUSD PancakeSwap pool, where she can normally earn 30% APY. Normally, she can swap roughly half BNB to BUSD then supply them to the pool and earn 30% APY.

  2. With Alpha Homora, she can borrow 150 BNB from Alpha Homora Bank, paying the borrower's interest rate, and together with her initial 100 BNB, she can now farm with 250 BNB (2.5x leverage!) -- earning a total yield of 75% APY, more then TWICE! the amount of her original annual yield.**

  3. Without any further deposit, she can continue farming as long as her position value does not drop below 187.5 BNB.

**Note: Alice also needs to pay the borrowing interest on the borrowed amount, which depends on the BNB utilization rate.

BNB Lenders

Interest Bearing BNB (ibBNB): When users deposit BNB to Bank, they receive a proportional amount of ibBNB token, a tradable and interest-bearing asset that represents their shares of BNB in the bank pool, similar to cToken in Compound.

EARN INTEREST: Interest paid by BNB borrowers are distributed to BNB lenders*, proportionate to the amount of BNB lent**. Lenders' interest rate depends on BNB utilization rate; the higher the the utilization, the higher the interest rate.

*Note: Borrower's interest rate model follows triple-slope-curve.

**Note: 10% of borrower's interest will go into Bank Reserves, which can be used as an insurance fund for lenders in case of unexpected scenarios. In the future, Bank Reserve authority may transition to community governance.

Liquidators

LIQUIDATION BONUS: Liquidators earn 1% of the position value for liquidating positions at risk (debt exceeding killFactor of the position's value).

Here is an example scenario for liquidator Charlie and overview of liquidation process:

  1. Bob leveraged 2.5x by borrowing 150 BNB with his initial 100 BNB to farm CAKE on BNB-BUSD PancakeSwap pool. Bob's total position value is currently 250 BNB.

  2. Later that week, there's a significant increase in BNB. As a result, Bob's total position value dropped from 250 BNB to️ 175 BNB, leaving his debt at 85% (150 BNB/175 BNB), which is higher than the killFactor of BNB-BUSD pool (80%). In this case, liquidator can come in to liquidate.

  3. When liquidation takes place, position value is used to pay debt first (in this case 150 BNB). 1% of the position value of 175 BNB is then paid to liquidator. Hence, liquidator will earn 1.75 BNB in this case.

  4. The remaining 23.25 BNB (175 BNB - 150 BNB - 1.75 BNB is then returned back to yield farmer.

Bounty Hunters / Reinvestor

REINVEST BOUNTY: Bounty hunters can call reinvest function to sell all yield farmed tokens in Alpha Homora portfolio for BNB, and reinvest into the yield farming pool, earning 0.3% of the total reward in the process!