The ALVA Wars — A deep dive into the scalability of Alvara
In this article, we explain how Alvara will become more than just its own platform and dApp, how it can become infrastructure that the entire space can utilize and build on, and why it belongs amongst the top cryptocurrencies on the market.
Setting the scene
It’s DeFi summer, and Curve Finance has just launched, causing the rise of the so-called “Curve Wars”. If you are unfamiliar with the phrase, the tl;dr is that Curve built a platform that incentivised its users to own as much veCRV as possible (acquired only through locking CRV on their platform), in order to maximise their yield. This spawned dedicated protocols that existed purely to gather as much veCRV as possible, allowing them to then incentivize their own users with higher yields, in return for the governance benefits of their users’ veCRV governance powers. For a more in depth look, you can find information on the Curve Wars here.
So how does this relate to Alvara?
Alvara is built on many of the same principles as Curve, but has evolved even further to become a true meritocracy, perhaps more so than any other protocol in the space.
Alvara have introduced a brand new token standard, the ERC-7621 (Basket Token Standard). The ERC-7621 enables the creation of fully asset-backed, tokenized funds that leverage on-chain liquidity to build a portfolio of tokens that is scalable, manageable, and even transferable.
Built to interact with the ERC-7621, the BTS Factory lies at the core of Alvara’s platform. With a single transaction, any on-chain user can create a Basket Token (BTS) made up of any number of assets they choose, and set specific weightings for each asset within that fund, which they can then re-balance, add, or remove assets from in the future, as well as scale up or down in TVL.
ALVA and veALVA
ALVA is Alvara’s native token, and veALVA (vote-escrowed ALVA) can be obtained by locking ALVA on Alvara’s staking platform. ALVA can be locked from 1 week to 4 years in exchange for veALVA that decays linearly until the time of unlock. ALVA can also be locked forever (burned) in exchange for veALVA that never decays. veALVA is the Protocol’s governance token, and can be used for both voting within the Alvara DAO, and during the weekly Gauge-Weight Voting events.
Cue the ALVA Wars
Any BTS minted via Alvara’s Factory contract is eligible to receive votes from veALVA holders on a weekly basis. Alvara’s gauge-weight voting mechanism allows veALVA holders to direct the weekly ALVA reward stream, fed from a reserve holding 44% of ALVA’s total supply. This incentivizes BTS managers and BTS LP holders to participate by providing gauge weighted yields in ALVA, which go directly to the LP holders of a BTS. So the more ALVA you stake, the more veALVA you receive, the more voting power you have, the more ALVA you earn, and on the cycle goes. This system allows BTS managers to incentivize users to add TVL to their BTS, in order to receive more BTS LP tokens and therefore more of the weekly rewards. And the more TVL, the higher the management fee, and the more avenues for providing additional incentivization. Starting to get the picture? BTS LP tokens are basic ERC-20 tokens that can be used in any way ERC-20 tokens can be including staking, governance, exchange listings, lending platforms or as derivatives. This gives limitless potential to the types of protocols that can be built around and on top of Alvara, each with their own unique methods of incentivizing their LP holders.
Curve Finance was about DeFi liquidity pools. And the Curve Wars spawned tens of billion dollar protocols, Alvara operates in the $10 trillion dollar investment fund industry. The potential is infinite.
About Alvara Protocol
The Alvara Protocol is a decentralized platform that utilizes the ERC-7621 (Basket Token Standard) to create and manage funds on the blockchain. Alvara offers a comprehensive fund Factory and Marketplace, with a transparent leaderboard showcasing the performance of every BTS created. ALVA and veALVA tokens assume crucial roles in driving the ecosystem’s growth and governance with veALVA holders wielding significant influence over the substantial ALVA reward stream. Removing traditional barriers, Alvara fosters a democratic meritocracy in crypto investing, enabling full lifecycle fund management, from creation to ownership transfer, within its seamless framework.
