Key Takeaways
- Alpha Finance is launching an oracle aggregator. It will initially use data from Band Protocol and Chainlink.
- The Alpha Finance team said that the update would make their DeFi products more secure and reliable.
- Launched in Oct. 2020, Alpha Finance has quickly become one of DeFi’s leading projects. Its Alpha Homora product contains over $1 billion in total value locked on Ethereum.
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DeFi Staple Alpha Finance is bringing together price feeds from multiple sources.
Alpha Finance Merges Price Feeds
Alpha Finance is launching the Alpha Oracle Aggregator to pull in price feeds from multiple sources. It will launch with data from Band Protocol and Chainlink, with other sources like Uniswap V3’s TWAP and API3 due to be added sometime this year.
Tascha Punyaneramitdee, the co-founder of Alpha Finance, explained that aggregating price feeds would make data more reliable and help improve Alpha Finance’s security. She said:
“The Alpha Oracle Aggregator will greatly increase the reliability of data sourced, add flexibility and scalability for dApps, and increase security by limiting the effects of potential price manipulation and exploitation within the industry.”
Data oracles are a fundamental jigsaw piece in the DeFi puzzle. They’re used to connect real-world data and APIs that power smart contracts. If a protocol needs to create a synthetic asset of gold, it may use an oracle to find the market price of gold.
In the past, DeFi projects like Alpha Finance have tended to rely on only one oracle, which carries a risk if the source goes down or gets manipulated. Some DeFi applications have sought to resolve the problem by integrating multiple oracles from several blockchains, though that involves friction. Oracle failures have also contributed to multiple million-dollar losses in DeFi hacks over the last year.
By aggregating the data, Alpha Finance is hoping to improve the consistency and reliability of the data it uses.
Oracles are essential to Alpha Finance, which has become best known for its leveraged yield farming offering. In a first for DeFi, the project allows users to borrow a percentage of liquidity to increase the yield they earn via its Alpha Homora product. It relies on oracles to determine whether a leveraged position is close to liquidation by calculating the collateral value and borrowed value.
Alpha Finance’s Future Plans
DeFi has grown rapidly, with $85 billion of value locked in the ecosystem today. Of that $85 billion, Alpha contains roughly $1.35 billion. The growth rate has led to the launch of many new tokens, which can cause problems for apps using single data oracles.
The Alpha Oracle Aggregator will use up to three data oracles for a single asset. Punyaneramitdee told Crypto Briefing that it would function on other chains beyond Ethereum once the oracles are integrated. She said:
“Once the Alpha Oracle Aggregator is integrated to multiple data oracles, Alpha Finance can take it to deploy on other chains and continue to work with Band Protocol and Chainlink seamlessly on the new chain without needing to set up new infrastructure.”
Alpha Finance launched on DeFi’s base layer last year but recently went live on Binance Smart Chain. At the time, the team said it was embracing the “multi-chain future” with more chains and Layer 2 solutions to follow.
Alpha Homora is the project’s first product, though others will launch in the future. One of those will be AlphaX, a decentralized perpetual swap trading market. The project is hoping to unveil several innovative DeFi products.
Alpha Finance recently launched staking for its native token, ALPHA. The token trades at roughly $1.85 today, putting Alpha Finance’s market cap at $530.4 million.
Disclosure: At the time of writing, the author of this feature owned ALPHA, ETH, and several other cryptocurrencies. They also had exposure to UNI in a cryptocurrency index.
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