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How Alpha Homora Works

Welcome to this post, where we are going to see how alpha homora works and what you need to know to use this platform without problems.

Alpha homora offers two products, the option to do leveraged farming through platforms such as Trader Joe, and a proprietary lending market for the liquidity of leveraged farms.

What is Alpha Homora

Alpha Homora V2 has a borrowing functionality as well as a leveraged yield cultivation functionality. There are a total of 3 parties that play an important role in Alpha Homora V2 in Avalanche. They are the lenders, the yield farmers or yield farms and the liquidators.

Lenders can lend many assets, e.g., AVAX, WETH.e, USDT.e, USDC.e, DAI.e, WBTC.e, to earn a higher lending interest rate compared to other protocols. This is because there are greater incentives for users to borrow Alpha Homora V2 assets to leverage yield farming. The lending interest rate comes from leveraged yield farmers/liquidity providers borrowing these assets to yield farm/provide liquidity.

Yield farms can earn an even higher farm APY and trading commission APY by taking leveraged yield farm positions. By taking on leverage, Alpha Homora V2 will borrow specified assets on behalf of users for farming.

Liquidators can earn up to ~5% for higher volatility currencies (WETH, WBTC, WAVAX) and up to ~3% for stablecoins (DAI, USDT, USDC) for liquidating positions that have a 100% leverage ratio.

Alpha Homora has a very similar operation to the Alpaca protocol, but on the Avalanche network. Where it offers great returns for farming using leverage, with high risk. Although if you are looking for a safer option, you can deposit in earn your stablecoins or cryptocurrencies for a good annual %.  The protocol has more than 300 billion dollars.

Yield Farming

In yield farming, you can do farming using leverage and get a higher annual return, with a higher risk. You can see the different LP Token pairs and the platform they use to achieve this profitability, usually trader joe.

On the right you can find the breakdown of where the annual % you can get. Keep in mind that this % is with maximum leverage, which is not recommended because of the risk of being liquidated.

To enter a position, select the pair you are most interested in and click on farm. Here, you must indicate the same amount of the two cryptocurrencies, or you can only indicate one, and it will be adjusted directly in a 50-50 ratio to create the LP. If you do not know the risks of being liquidated and the impermament loss, under the LP Token supply you can find a video where these concepts are explained.

With the amount indicated, click on next. Here, you must select the level of leverage you want to use. You can use the basic mode, which will borrow the same amount of both tokens, while the advanced mode, you can borrow more than one cryptocurrency or another. It is recommended to use the basic mode for less complications. When you have selected the leverage level, click next.

Finally, review all the information of your strategy and your position, approve the tokens and click confirm. This way, you will have your LP Tokens position with leverage generating an interest.

Now, if you go to your positions, you will see 4 options. Add, remove, close and harvest. The first one, add, will give you more liquidity if the price drops and you are at risk of being liquidated. Remove, you can withdraw a part of the position whenever you want. Close, to close your position and get your tokens back. And harvest, to claim the rewards generated by that farm.

Earn

In Earn you can find options with less risk and only one token, to also generate a good interest. Unlike other platforms, here you can only deposit, not borrow.

Since the liquidity placed here is distributed to the leveraged yield farming positions. Even so, if you want to have your cryptocurrencies in a safe and stable way, generating a good annual %, it is a great option.

We can currently find 6 cryptocurrencies to provide liquidity, where I would highlight AVAX and stablecoins with very interesting annual %. To place your tokens, simply click on supply, indicate the amount and click on confirm, confirm in your wallet and that’s it.

In this simple way, you can start generating the annual % that you can find in APY. You can also withdraw your tokens at any time by clicking on withdraw. Also from the dashboard you will be able to see the profits you have been generating with your cryptocurrencies deposited in earn.

Before entering yield farming with leverage, I recommend you to know well the risks of using LP Tokens and leverage, to avoid being liquidated and losing your tokens by ignorance. Also, take into account the volatility of this market.

I hope it has helped you to know more in detail how alpha homora works and how you can take advantage of this platform. Remember that if you don’t have an account with binance, you can create one just below.

Platform: Binance
Min. deposit: $10
License: Cysec

Very low commissions
Exchange with more cryptocurrencies

5/5

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