Liquidity Mining

Overview

The Liquidity Mining program has been extended. Additional 6,000,000 ALPHA will be distributed during this 30-day period to Alpha Homora users who open leveraged positions of more than 1x during the period of January 11th, 12pm UTC - February 10th, 12pm UTC. This includes leveraged yield farming and leveraged liquidity providing.

As Alpha Homora V2 will be launched this month in January, there will be new additions to the liquidity mining program to ensure a smooth migration process from V1 to V2. We will share more details on this ahead of the launch of Alpha Homora V2.

For those who have leveraged positions that are more than 1x open already, you don't need to close and re-open a new position to continue getting these ALPHA rewards.

Leveraged yield farming

Leveraged liquidity providing

Why are we only distributing ALPHA to borrowers? What about the lenders?

ETH lenders bear minimal risk when compared to borrowers on Alpha Homora. Hence, by giving liquidity mining rewards to borrowers, they will be getting higher risk-adjusted returns, be more likely to borrow more ETH (increasing asset utilization rate), and thus be paying higher interest rate on ETH to lenders.

While ETH lenders may not directly get liquidity mining rewards from this liquidity mining part 2A, they will be getting higher lending interest rate on ETH (up to 50%), which is the highest lending rate that they can find in the market.

Also, lenders can actually earn ALPHA from Part 2B: Trading Volume Mining.

How to open leveraged yield farming positions on Alpha Homora?

  1. Select yield farming pools that support more than 1x leverage.

2. Enter how many ETH or another token (or both) you want to use to farm, select leverage level that is more than 1x, then click farm. If you select ETH/DPI pool, another token here refers to DPI.

An example below shows ETH/DPI leveraged yield farming pool.

How to open leveraged liquidity providing positions on Alpha Homora?

  1. Select liquidity providing pools that support more than 1x leverage.

2. Enter how many ETH or another token (or both) you want to supply to liquidity pools, select leverage level that is more than 1x, then click farm. An example below shows ETH/YFI leveraged liquidity providing pool. Another token in this case refers to YFI if you select ETH/YFI pool.

How will ALPHA be distributed to eligible Alpha Homora users?

Eligible users will get ALPHA based on how many ETH they borrow proportionate to the total ETH borrowed from Alpha Homora.

How to claim your ALPHA?

Accumulated ALPHA earned will be shown under your wallet address on Alpha Homora. Users will be able to start claiming ALPHA every Thursday by clicking on your wallet address then clicking claim.

Extended Liquidity Mining program

For the first available claim of the extended Liquidity Mining program, ALPHA earned from your activity during Jan 11th, 12pm UTC - Jan 14th, 12pm UTC (3 days) will be processed on Thursday Jan 14th, 12pm UTC, and will be available for you to claim after the computation and deployment is ready.

For periods after that, ALPHA earned from your activity will be processed weekly at 12pm UTC every Thursday, and will be available for users to claim after the computation and deployment is ready.

Accumulated ALPHA earned will be shown under your wallet address on Alpha Homora. Users will be able to claim ALPHA by clicking on your wallet address, then clicking claim.

ALPHA rewards that have not been claimed will be accumulated and be available for users to claim later as well.

What do eligible users gain and what are their risks?

🧙‍♂️ Leveraged yield farmers

Gains

  1. Earn ALPHA 💥

  2. Earn farmed token on leverage (e.g. SUSHI, INDEX, PICKLE)

  3. Farmed token earned is automatically reinvested and added to your yield farming position

  4. Earn trading fees on leverage for providing liquidity to pools

Risks

  1. Impermanent loss (same risk as other yield farming opportunities on AMM pools)

Since you are providing liquidity to Uniswap or Sushiswap by farming in these pools, you are exposed to impermanent loss risk.

2. ETH price going up can cause your position value to decrease when you open position with leverage of more than 1x

When opening a position with leverage of more than 1x, some of the ETH you borrow is being swapped to another token (sold to buy another token), so you have both assets in equal value to supply to liquidity providing pools.

Hence, by opening a position with leverage, you are effectively shorting some ETH. As a result, your position value can decrease when ETH price goes up and increase when ETH price goes down relative to another token (e.g. DPI for ETH/DPI pool)

🧙 Leveraged liquidity provider

Gains

  1. Earn ALPHA 💥

  2. Earn trading fees on leverage for providing liquidity to Uniswap or Sushiswap (for ETH/SUSHI pool)

Risks

  1. Impermanent loss (same risk as other yield farming opportunities on AMM pools)

Since you are providing liquidity to Uniswap or Sushiswap by using Alpha Homora, you are exposed to impermanent loss risk.

2. ETH price going up can cause your position value to decrease when you open position with leverage of more than 1x

When opening a position with leverage of more than 1x, some of the ETH you borrow is being swapped to another token (sold to buy another token), so you have both assets in equal value to supply to liquidity providing pools.

Hence, by opening a position with leverage, you are effectively shorting some ETH. As a result, your position value can decrease when ETH price goes up and increase when ETH price goes down relative to another token (e.g. DPI for ETH/DPI pool)

What does it mean to have both Liquidity Mining and Trading Volume Mining running at the same time?

Having both Liquidity Mining and Trading Volume Mining be running at the same time means that the weekly ALPHA rewards that you earn from Liquidity Mining from opening leveraged positions on Alpha Homora can be used to supply to ALPHA Pool (ibETH/ALPHA) on Alpha Homora and earn even more ALPHA from Trading Volume Mining. Learn more about Trading Volume Mining (Part 2B) here.