The Delphi Podcast Host and GP of Delphi Ventures Tom Shaughnessy sits down with Tascha Pan, co-founder of Alpha Finance Lab, which aims to be a forefront DeFi lab through building and incubating many DeFi ecosystems and products that capture unaddressed demand in an innovative and user-friendly way.
The Delphi Podcast Host and GP of Delphi Ventures Tom Shaughnessy sits down with Tascha Pan, co-founder of Alpha Finance Lab, which aims to be a forefront DeFi lab through building and incubating a number of DeFi ecosystems and products that capture unaddressed demand in an innovative and user-friendly way. The two discuss the Alpha Launchpad (the first-ever DeFi incubator program), the Alpha Universe and Ecosystem, value accrual to $ALPHA, and much more.
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(1:37) – (First Question) – What is Alpha Finance.
(4:40) – How Alpha Launchpad works / Alpha Launchpad applications.
(8:10) – What Tascha looks for in a founder.
(12:46) – Scaling with Alpha Launchpad incubator.
(15:29) – $ALPHA token / token econ design and walkthrough.
(21:10) – The value flow to $ALPHA stakers.
(23:19) – Tascha’s thoughts on the dichotomy between the project tokens and the $ALPHA token.
(24:23) – How Alpha makes sure that the value flows are to $ALPHA stakers for 1, 5, 10 years.
(27:01) – Tascha’s thoughts on non-developer focused projects.
(28:44) – Alpha Homora update.
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Hey, everyone. Welcome back to The Delphi Podcast. I’m your host Tom Shaughnessy, I help run Delphi Ventures and I’m one of the hosts of this podcast. Today I’m thrilled to have back on Tascha of Alpha Finance. Tascha has been on a couple of times, we’ve covered several topics of the Alpha ecosystem, today we’re going to be covering Alpha’s new launchpad. Tascha, how’s it going?
Good. Thanks so much for having me here the third time, third time is a charm.
Yeah. No. It’s been awesome to have you on. Disclosure, we’re investors in Alpha so we’re super excited and know the story quite well, but how’s everything going on your end building Alpha? It’s been quite a journey.
Yeah, definitely. We’re working on the next Alpha product which we’re going to share a bit more to the communities pretty soon. And then we recently just launched Alpha Launchpad, which is the first DeFi incubator program. And pretty much we’re getting a lot of traction and seeing a lot of growth from it so we’re scaling it to be a bigger launchpad program. So yeah, just wanted to take this time to explain a bit more on what it is, what’s the motivation behind it, and how it really brings value accrual back to Alpha.
That’s awesome Tascha. And for those who haven’t listened to the other episodes, and we’ll link to them, can you just give the quick 30 second intro on what Alpha Finance is at a higher level?
Sure. So Alpha Finance Lab is a DeFi lab. We build and incubate a number of DeFi products that match with the market landscape, so making sure that we address the unaddressed market demand. And the reason that we structure it this way because we see that DeFi is going to be here for a long time, right? But we just don’t know how it’s going to look like because the industry itself is really young at the start and where we are now and it’s going to change quite a lot as we grow bigger, right? So by structuring it this way that means Alpha Finance Lab can be relevant and be the main ecosystem player at every stage of DeFi.
That’s awesome. So the launchpad, I guess kind of plays into your vision of kind of decentralizing the lab itself, right? Because I mean your vision is to create multiple products and services, through doing that you need a lab to obviously think through these things but you’re now kind of expanding that beyond just you and Nipun and the team to kind of new founders.
Correct. And this not only help de-centralized the project itself but also help grow the talent pool in DeFi as well because there are going to be a lot more developers from non-DeFi industries that want to come in and really contribute and start a new project, right? And they can also do that from Alpha Launchpad side because we’re going to help train and help advise and mentor quite a lot of things. So it’s different from other launchpad programs in the sense that the other launchpad programs focus more on launching the token itself but for Alpha Launchpad we focus more on really incubating from the start to really growing that project out post-launch, so you can think of it as a playbook to launch and grow successfully in DeFi.
That’s awesome. And I guess when you first started Alpha, I mean, one of your core focuses and I think what you guys differentiated on was you offered products that were niche but that filled a market and that really weren’t popular yet, I mean, you were able to do that really well. I mean, with this new program it kind of seems like you have to make the decision of whether to kind of build internally or now kind of to find a founder to build for you. What’s that dynamic like where you decide to build with your own team versus kind of partnering and mentoring with somebody to launch something within Alpha Lab?
Yeah. So there are two types of applications that we get for Alpha Launchpad, right? One is from developers themselves. In this case they may have some ideas and they are really, really capable but the idea may not be as crafted or fine tuned and the team is still also a small team, right? So in that case then we also internally have a few products in mind that we came up with, right? But due to different tokenomics or due to how it plays out with the Alpha ecosystem it may not work if it were to be added in the Alpha ecosystem itself, which I’m going to explain a bit more on what is the rationale for that, right? But then we have quite a backlog of those products too so we will plug in those products with the developers that we find and pretty much are the really capable developers, right? But may not have the right tools and ingredients at the start so we will help provide that ingredients.
I would say that’s more of a rare case of applications that we get because majority of the applications that we get and what we look for as well are the early DeFi project teams that have their idea and have developed to a certain stage and pretty much wanted to work with us on fine tuning that are looking at different advices from growth hacking side, from community building side, from launch strategy, from adjusting a little bit on the product side to make sure it fits the product market fit really well, right? And then working with us to grow post-launch so I think a lot of those applications are the type that we see more often. And in terms of back to the original point of what kind of products that we differentiate in terms of the ones we build ourselves or the ones that we plug in with the developers, really capable developers that have applied, right?
The key point here we’ll come down to the tokenomics part of it and how that will play in terms of wood strapping and growing the product. Because once we add more Alpha products out, right? We have to see how that Alpha product will be related to ALPHA tokenomics which is created to stake and earn protocol fees from all the Alpha products, right? So if we see that, hey, the new product will work really well but it actually needs this unique type of token on mix to really help bootstrap and grow the product in its own way and it cannot be used with the ALPHA tokenomics that we already have, then in that case it definitely makes a lot more sense to spin out into a different type of project.
That’s awesome. Yeah. I really want to get into the token economy value accrual, but one more quick question, I guess a lot of your time now has to be spent kind of grilling these founders and interviewing them and making sure they’re a fit but on the other side you’re also looking for founders where they might not have everything because you’re bringing a lot of Alpha’s ecosystem to them. They gain the product market fit of the Alpha ecosystem, they gain you, they gain Nipun, they gain the team. But what do you exactly look for in a founder that will basically make you say, hey, we really, really want to work with this person, we want to incubate them even though they might not have everything? Because in essence you’re bringing what they’re lacking.
Very good question. And a lot of it comes from two sides, right? One is the peer skills as well. So let’s say if they’re developers, then their background in coding, in developing, or if they’re coming from non-developer side of things, then we need to see what’s the key strength or what I usually call it is, know the secret sauce of that person, right? And that secret sauce is going to be something that will be the key differentiator of growing that team, so definitely that is the first point. The second point is also their entrepreneurship and pretty much their want to become an entrepreneur, right? Because starting out a DeFi project is really tough especially in a market that may not be as full as before, right?
So you got to go through a lot of challenges growing your team, growing your community, working with cyclical market and things may not be as nice all the time, right? So we really need to find a person who want to be in this position no matter how hard it is or how much obstacles they have to be in. So what that translates to, is someone who is really passionate in DeFi and blockchain technology and that will pretty much making sure that they’re here for the longterm.
That’s awesome, yeah, it’s really hard to find. And do you think that this founders understand that you aren’t here just to launch a token? Do you think that they understand that you’re here to help incubate projects that should be here for five, 10 years that should be category winners?
Yeah. I think that’s also something that we definitely need to communicate and constantly communicate, right? Because it’s different from other launchpad programs and that launchpad itself has been used mostly to launch a token in a sense. So definitely we need to make sure the whole developer community and early DeFi project teams know about this offering that we have in this space.
That’s awesome. And Tascha, before we go to the nitty gritty of the token econ side, I was just wondering, is there a comparison today in crypto that what you’re doing kind of maps to? Because I’ve been part of a couple incubators, mentor, we obviously run a fund, but I haven’t really seen a way to kind of decentralize I guess the launch of applications pinned to another protocol unless we kind of just start discussing Ethereum itself and all the applications built on top but I think that might be too broad of a comparison.
Yeah. I don’t think there’s a direct comparison that I see yet and I think it doesn’t mean that it will continue to be this way, right? But I think a lot of the DeFi projects may also look into starting their own launchpad similar to us because I think it makes sense in a way that we know how to start, we know how to grow and to make sure that others know and making sure that we all help each other across the whole journey as DeFi is a long process to grow the whole industry out, right? Then to effectively do that and making sure the incentives are aligned then it’s to do via launchpad.
So I would not be surprised if there are going to be more programs like this in the future but I think for us the fact that we started now and being the first one to start will say a lot of things of what we see of the industry, what we can provide in terms of product market fit, hence we’re the first ones to start this out, right? So in the future what I see, right? Is going to be more of different launchpad pottering with each other really helping to grow the whole community out.
Makes sense. And I guess the other thing to kind of talk about is I guess just the scale and end state of what you’re trying to do with Alpha Launchpad, right? I mean, I guess my original thesis for Ethereum was just you have the largest Petri dish of projects that could launch and develop and you won’t figure out what comes out of it but they’ll probably be big and that’s kind of happened, I guess it’s not a crazy thesis I’m sure everyone had the same one.
But with Alpha you’re kind of doing this similar thing where you’re allowing any project to come to you but I guess you’re lowering the barriers for them to be successful because you’re helping with the technical design, you’re helping with the token econ you’re helping with fundraising. But I guess the question for you is, your time is limited and your team’s time is limited, how do you scale how you help these teams? And then I guess just thinking a year out or two years out, I guess, how do you decentralize this process so that anyone within Alpha can help the next Alpha project that launches on top of you guys?
Yeah. Very good question. And I think how I’m thinking of that, right? Is similar to different concepts combined. The first concept is similar to the traditional incubator program in which the incubator themselves they don’t know everything for sure. They partner with a lot of different groups, let’s say this particular group is experienced or they’re specialized in marketing, right? This particular group is specialized in investors and et cetera. So the core incubator that we see in the traditional world is they don’t have to be all in one in, in the team itself, but they actually partner with different groups to make sure that whatever they give will be the full package to the incubator project, right? So that is something that we’re looking to achieve in the future as well, to make sure that we partner with the right groups on community building side, on marketing side, on security, of course my contract side, right?
So we have this huge ecosystem of Alpha Launchpad groups that pretty much as an aggregate can provide support accordingly to the incubator projects, so that is the first fold. The second fold is when this support groups become more decentralized, right? Where community members who have been contributing or developing in various other ecosystem may want to come in and contribute and really help out on the smart contract security side of things. And I think that should be the path that we go towards to make sure that we can scale this as fast and also in a scalable way.
That’s awesome Tascha. I’d love to kind of get into the token econ side of this, because I think the way that you’ve designed launchpad it helps drive a lot of, I guess, value accrual to the ALPHA token itself, I’d love to kind of dive in there.
Yeah. So typically now when ALPHA holders stake their ALPHA tokens on tokenomics.alphafinance.io, they are getting protocol fees that we collect from Alpha products. So that means, the more fees we collected, the more usages we have, the more products we build, the more value accrual we’ll go to ALPHA stakers. So that will still be the same with Alpha Launchpad but what’s going to be additional to ALPHA stakers is that they will also get the incubated projects tokens, only a portion of it though. They will get a portion of the incubator projects token by just staking ALPHA. So that means that you have your ALPHA stake, you’re getting the same protocol fees, or even more from more products that we build, and you’re also getting a new sets of tokens which are from the incubator projects from Alpha Launchpad.
That’s awesome. And I guess it’s not live yet, right? Do you think the market will kind of pick up on that? I guess the concern is where the value flows between the launch projects are in Alpha, I guess determining that split has got to be kind of surgical. I guess, how do you think through splitting that value flow for the projects launched on top versus the, sorry, the value flow to Alpha because it seems more like an art than a science and you kind of have to be subjective on, I guess, the value both sides bring, right?
Yeah. So this is also depending on how much support we give them and which in turn relates to how early or late stage the teams come to us. So if the teams are late stage and they have figured a lot of things out already and we’re giving them the final push to really launch successfully and then grow tremendously afterwards, then what the ALPHA stakers get are going to be less than the portion of the tokens from the projects that we help a lot, right? From the technical side, from the product side. But for the first project which is actually coming up pretty soon, we’re looking to have about five to 10% of their project token allocated to ALPHA stakers.
That’s incredible. And Tascha, I guess just, I mean, every time I talk to you you have a presentation ready to go, you’re extremely well-organized. I mean, building this out, I’m wondering what the process is like when a project joins or is approved by you guys and comes on, is there a lot of, I guess, reusable code or templates they can use or go to market strategies, I guess how much of this have you, I guess, automated or pre set up for the projects that want to launch on top of Alpha or, sorry, not on top but within the Alpha Universe?
The automated part comes in the evaluation process more so than the support we give them. Although there are some types of support that can be applicable to various projects, for instance community building tactics or growth marketing tactics, right? But the key support that we really bring comes in a number of form, right? And not just limited to community building or growth hacking, which can be applicable to a lot of projects, but let’s say the product market fit itself, we read the product, read the Whitepaper, talk to the founder and we can give them advice already on how they should adjust the product to make sure that it tailors more to what the DeFi users want and need at the moment. So I think that is something that is less automateable but will really be the key sauce for them to launch successfully. Yeah. So that’s on the support part, but the automation part itself comes from the evaluation processes which we have internal templates, we have internal processes to ensure that it doesn’t take too much time to filter the projects out.
That’s awesome. Yeah. Having that process down will save a lot of time and it’ll help them get to market faster. And just to go back to the token econ design again, just to make sure I understand it, basically what you’re going to do is when there is a new project you’re going to distribute their tokens to the ALPHA stakers who stake, I guess, how do you figure out I guess the percent of tokens to these ALPHA stakers, is it time or weight based or? And I guess the second question for you is, are you still running with I guess the traditional launchpad aspect where people will allocate funds directly for tokens?
So the first question we take into account amount they stake and the time as well. So the longer you stake, the more allocation you will get. So we make sure that the really long-term committed ALPHA hoarders and ALPHA stakers, right? Are the most rewarded. So that’s the first question. The second question, actually, it won’t be a sale, it will be more of an airdrop sense and the reason we want to do this is to avoid the complications on the regulatory side of things. So what that means is by staking ALPHA you will get protocol fees from Alpha products and you’re going to get these new sets of tokens.
That’s awesome. And the value flow, let’s say a project launches within the Alpha Universe when you incubate and let’s say it’s wildly successful, user case doesn’t really matter for this example, but let’s say that it’s driving a lot of value to ALPHA stakers, how exactly do the ALPHA stakers, I guess, include that value? Obviously Alpha has staking but I guess, are there any lockups implied there? Is it distributed in their native token or is it distributed in Alpha’s native token? And I guess, how does the weighting work for ALPHA stakers? I believe it’s also a similar model where it’s time and stake weighted.
Yeah. So we will actually adjust the end bonding time from 70 to 30 days, which we’re going to announce quite soon as the first incubator project is coming up. So once we adjust the onboarding time to one month, 30 days, right? Then that means the minimum amount of time anyone can stake is one month. So in addition to that onboarding time, we don’t have any minimum requirement of how many ALPHA you have to stake and how many months, right? But the longer you stake, of course, the longer or the more allocation you would get of the incubator projects tokens. Let’s say that you want to stake only one month, only through the onboarding period and then you’re done, right? You will still get a portion of the incubator projects tokens but just not a lot than comparing to if you were to stake three months or six months, right? So that’s on the ALPHA stakers side.
On the incubated projects token side, there will also be lockup and vesting period for each project, the length of time will vary depending on the agreement that we have with them. But how we’re thinking of for the first project, right? Is more on three month lockup and then three month vesting. So that means for an ALPHA staker to maximize their yields is to stake for six months. Also, they can withdraw if they want to but they will not get as much as they were to stake six months.
That’s awesome. And I guess, how are you thinking about the dichotomy between the project tokens and the ALPHA token? It seems to me ALPHA is kind of an index bet on the success of all the projects and then if somebody wants to go more risk on and they have a thesis for a specific project launched, they could kind of just go along that token. I guess what’s the difference between the two there on the risk spectrum?
On the risk spectrum. I think this will then relate to the tokenomics and the product of that particular project so yeah, I think it really depends so I cannot say and speak for all the projects, right? But in terms of the rewards itself, it will be rewarded in that particular token so we don’t plan on selling the other incubator projects tokens into our own token to distribute to ALPHA stakers.
Got it. Sorry, my phone just went off. It’s podcasting 101, it’s not to have your phone on, apologies there.
It went through my laptop. But no, that makes a lot of sense Tascha. And I guess one of my more abstract questions for you is I guess just the enforceability of the value flows longterm, right? If Alpha successfully launches a project within the Alpha Universe and you have a value flow to ALPHA stakers, it’s incredible. But as we know with any successful project the original founders or the token holders are going to want the value flows all to them. Do you think there may be any issues down the line with just enforcing those value flows or I guess, a different way? I guess, how do you make sure that those value flows are to ALPHA stakers for 1, 5, 10 years?
Yeah. I think this comes with how we will decentralize Alpha as well and this is also the reason why it’s taking us a bit of time because we really want to think through a good structure. And once we have a good structure and process, right? It will be an effective Dow. And I think the worst thing that I don’t want to see happen, right? Is we launch a Dow and it becomes a centralized version of a Dow, which kind of beats the purpose. So making sure that we have the right people at the right place and making sure they have the incentives aligned will help make sure that the whole Alpha Finance Lab will not just tie to me or Nipun, right? But still tie to the whole Alpha community which are really aligned on incentives to make sure that we’re growing off our launchpad and we’re going off our products to the right direction.
No, that’s fair. And I mean, I guess Alpha’s value add to these projects will change as time goes on, right? I mean, at the start you guys might be offering say token econ design and some growth consulting, technical consulting, but down the line I feel like there’s ways for you guys to offer value in different ways, right? What if you guys brought on your own audit team and started doing continuous audits for the projects incubated within Alpha. I feel like there’s different ways you can kind of grow to kind of make sure that the value Alpha brings to the projects is not just at the beginning.
Yeah, that’s a good point. I think it changes with the landscape and the demand that we see, right? And this is only the beginning and the start. And of course, if there are different opportunities and we come and see that there is a possibility of us adding an audit team or adding more types of support to the incubated projects, then that will also be something we do, so it won’t be limited to what we offer now, for sure.
Yeah, no, that’s totally fair. And I guess the other side of this, the projects coming to you to build within the Alpha Universe, you said most of them are probably more developer focused. Are there any more, I guess I categorize this really quickly, it’s just like extroverted non-developer types coming to you? Because I feel like there’s a lot of people with a lot of good ideas that just don’t have that developer coding experience, whereas, those that have the developer coding experience generally are able to kind of just launch something themselves.
Yeah. I would say we’re not limited to developers who apply differently and we’re definitely open to non developers to apply. And again, it comes back to the two main criteria that we look in a team, right? One is what’s the secret sauce in that person that make them really unique and will make sure that they will be able to run this project really well, right? Doesn’t have to know how to code, I don’t think that’s definitely a requirement. The second thing is definitely their passion in this space because that will determine their longterm commitment too. So we’re open but so far the applications that we see, I think, are more developers focused, I think just the nature of the whole talent pool in the landscape right now.
Yeah, no, that’s totally fair. And so Tascha, what should people look out for? Are there any, I guess, key dates on the horizon for the launchpad or anything that we should kind of keep tabs on?
Yeah. So I would say the first incubator project is coming up really soon. I don’t want to name drop any date yet because things can change all the time, right? But it’s pretty exciting and it’s coming up in a pretty near time horizon.
That’s awesome. And Tascha, before we close out, I love this focused episode, but can you just give us an update on Alpha Homora broadly, I guess, just on traction, products, total value lock, users, anything you could share just as a recap overall?
Yeah, sure. So Alpha product now, Alpha Homora itself, there are three main products, Alpha Homora V1 on BSC and then V2 and Ethereum. In total, there are about one billion total value lock at the moment and the product itself is the leveraging farming product. So we created the leveraging farming category and we became the first leveraging farming product that offer one of the highest APY and lending rates for lenders and also offer a way for you farmers to leverage on their positions. And then another quick recap on the staking side, there are about 76 million of ALPHA being staked right now so that’s about 27% of the settling supply.
That’s awesome. And yeah, I wanted to ask on kind of like unit swap V3 and diverse leverage yield farming, but frankly we might have to save that for a whole nother episode.
That’s awesome. But Tascha, thanks so much for covering off the launchpad, always love having you on. We’re thrilled to be investors, obviously just a disclosure there for everyone listening as always. But regardless, super excited for what’s to come out of the launchpad and really excited to see the first project you guys launch.
Great. Thank you. Thank you, Tom.