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Money Market ALPHA

Jul 5, 2021 · 5 min read

By Genevieve Yeoh

Alpha’s native token $ALPHA has suffered the worst drawdown among comparable money markets since May, despite the launch of its Alpha Homora v2 product as well as healthy revenue numbers. One reason for $ALPHA’s depressed valuation could be its ~$37.5m outstanding debt to Cream’s Iron Bank that resulted from an exploit back in February.  As part of the repayment plan, Alpha would lock 50M $ALPHA tokens in a “time locked escrow contract owned by C.R.E.A.M.’s multisig to ensure C.R.E.A.M. V2 remains fully collateralized”,  while 20% of protocol fees (i.e. earnings) collected from Alpha products will periodically be repaid to the Iron Bank. As funds are repaid, the escrowed tokens would be proportionally released.

Given Alpha’s cumulative realized fees  ($4.9m at the time of writing) roughly ~$1m should have been repaid to Cream. However, the 50M escrowed tokens have not moved. Based on an outstanding debt of ~$37.5m and the current annualiz

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