Alpha Finance to Incubate its First Project, Beta Finance, on ALPHA Launchpad

Alpha Finance, through its Alpha Launchpad, will be releasing its first project: Beta Finance, a platform that aims to reduce crypto volatility and bring about market stability.

By
Chung Yee
on
July 11, 2021
Category:
BSC News

The First Incubated Project

Alpha Finance will be launching Beta Finance, which aims to improve crypto market efficiency by providing short-selling tools to Decentralized Finance (DeFi) users. This allows players to counter over-inflated token prices. Beta Finance is the first project to be incubated on the Alpha Launchpad.

Beta Finance is a platform that solves an existing problem in the DeFi landscape. Taking a short position usually requires multiple interactions with various platforms, and users are forced to pay multiple transaction fees. Beta Finance looks to solve the need for multiple transactions by allowing a 1-click short-selling tool to its users.

Source

The existing gap in short-selling results from assets not being supported by money markets within DeFi. The lack of entry and exit often results in massive market volatility. Speculation is the leading cause of market volatility. 

Alpha Launchpad is part of the larger Alpha ecosystem that allows for interoperability among Alpha products and projects incubated through its launchpad to maximize returns and minimize risks. 

Source: Taking a graph from Coingecko, Beta Finance illustrates how the asset suddenly spikes and takes a plunge  


Attractive yield rewards would encourage yield farmers to purchase more tokens on the platform to reap the higher rewards. When the cycle surpasses its equilibrium, instability can be triggered. The ensuing result would be panic selling and liquidation. It harms the entire DeFi ecosystem because excessive volatility keeps away retail and institutional users.


Counterbalancing for Healthy DeFi Growth    

A short position is borrowing an asset to sell at its current increased price only to buy back later when the price has dropped to a more reasonable value. The strategy is a tool used to counterbalance the upward pressure and prevent the asset price from being overly inflated. 

BetaFinance will create money markets where crypto-asset holders can place their tokens in return for a solid Annual Percentage Yield (APY). This money market will allow users to carry out a short position when there is no existing money market in DeFi. In situations where there are existing money markets, Beta removes the need for the users to make multiple interactions with various DeFi protocols and pay the gas fees. 

The counterbalancing mechanism is fundamental when no money market exists. An inflated asset price in this situation will not correct until it reaches a point. At this point, any correction will be an immediate and drastic plunge that will result in massive losses to those that got hyped by the entire furor.  


Maturing the DeFi Market

One of the most critical aspects of an asset is price stability. Extreme swings and volatility do not augur well for DeFi to progress and find its way into mainstream finance. 

Token prices hanging at precarious values will create excessive risks to its investors. Projects could suffer because of speculations on the tokens. The short-selling feature in Beta Finance solves this. 

Source: Assets that are overinflated by speculation would drive away real investors seeking value

The product offered by Beta is one solution in the larger DeFi infrastructure, and it is an important one. The more derivatives built around an asset create a healthy and self-correcting mechanism that keeps the price movement realistic. It also ties the asset closer to fundamental investing data. With less room to speculate, investors seeking medium and long-term prospects can find the entire crypto market more enticing. 


AlphaFinance’s Solutions

Projects incubated through the Alpha Launchpad will be assisted on the technical aspects of the DeFi product and the accompanying strategies. Alpha Launchpad will also vet the project team and the viability of every DeFi product. DeFi products can be launched on the Ethereum blockchain or the Binance Smart Chain. Applications can be submitted here


About AlphaFinance

Alpha Finance Labs is fully focused on pioneering innovation in DeFi and enhancing DeFi adoption by the crypto community. The Alpha Universe has its own Alpha ecosystem, which consists of Alpha products that maximize returns while minimizing risks. The platform seeks to grow its ecosystems through the Alpha Launchpad incubator program continually. As the DeFi space keeps developing, Alpha Finance Labs has positioned itself to be at the forefront of DeFi innovation.


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Chung Yee

Chung Yee has a legal background and has been involved in research works for the legal and compliance industry. Writing is his passion, centered on topics such as the blockchain and finance. His largest crypto holdings are Solana, Ethereum, and BNB Token.

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