In fact, Alfprotocol is a set of agreements designed to provide diversified capital between and between investors and traders to maximize leveraged and unlevered liquidity.
The agreement will provide unleveraged products in the form of AlfMM (decentralized transaction service) and AAlf (excess mortgage lending service). On the other hand, leveraged liquidity is processed through a module of Alfprotocol, which communicates with external protocols (such as Solaris and Jet protocols). It is expected that more will be added in the future to provide leveraged products up to 200 times.
Solana makes decentralized high leverage possible
For other protocols that rely on Ethereum’s “Proof of Work” (PoW) blockchain to provide support, highly leveraged positions have always been a problem. Due to its powerful feature, the volume of transactions per second, Solana supports the processing of highly leveraged positions, which significantly reduces transaction time (reaction time) compared to the Ethereum network.
The quick response time of Solana’s Alfprotocol will enable it to process position liquidation in a timely and safe manner to safely cover the liquidity provider’s assets with its allocated interest. Solana’s lightning fast delay is 27.5 times faster than Ethereum, creating a more secure agreement for investors and the entire system, which will depend on timely liquidation events, just in case, especially in the case of high leverage. The Ethereum network during periods of congestion may also pose risks to investors and traders, as transaction fees and time required soar, in some cases reaching US$400 per transaction.
In terms of highly leveraged liquidity clauses, Solana is a better choice
Since the feasibility of the highly leveraged liquidity clause only depends on the volatility of the asset and the reaction time of the agreement to liquidate unhealthy positions, the characteristics of the blockchain must become an important factor in determining which is the most effective blockchain. Having said that, compared to Ethereum’s 17 transactions per second and Cardano’s 250 transactions per second, Solana processes 59,000 transactions per second (tps), enabling it to successfully meet today’s requirements and the potential demands of future demands.
The potential of Alfprotocol lies in its diversity and flexibility, which can meet the needs of all traders and investors in a decentralized environment, as well as the security and protection provided by the Solana blockchain.