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  • 📌Get Started with BarnBridge
  • 🔒SMART Yield
    • Beginner's Guide to SMART Yield
    • SMART Yield Tutorials
      • How to buy junior tokens?
      • How to buy senior bonds?
      • How to withdraw junior tokens?
      • How to redeem senior bonds?
      • How to sell junior tokens?
      • How to sell senior bonds?
      • How to stake jTokens and earn BOND rewards?
      • How to unstake jToken?
    • SMART Yield Spec
    • SMART Yield Outcome Calculator
    • Advanced Guide to SMART Yield
  • 📊Smart Alpha
  • Beginner's Guide to SMART Alpha
  • SMART Alpha Use Cases
  • SMART Alpha Outcome Simulator
  • 🏛️Governance
    • Beginner's Guide to Governance
    • What can I do with BOND?
    • BarnBridge DAO Tutorials
      • How to get $BOND tokens?
      • How to obtain voting power (stake) in the DAO?
      • How to lock $BOND to increase voting power?
      • How to delegate voting power (vBOND)?
      • How to return delegated voting power (vBOND)?
      • How to withdraw $BOND from the DAO?
      • How to create a proposal?
      • How to vote on the proposal?
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  • 🚜Yield Farming
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  • Project Treasuries
  • Long-Tail Asset Speculators
  • Lending Platforms Seeking Low Volatility Collateral

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SMART Alpha Use Cases

How users can make the most of SMART Alpha

The utility of SMART Alpha will grow over time as its junior and senior assets becomes integrated into the wider DeFi ecosystem. Today, it should appeal most strongly to the following user types:

Project Treasuries

DAOs and project teams with material holdings of their native asset can diversify their treasury at unprecedented scale with the downside protection offered by the senior side of their respective asset’s pool. In doing so, they simultaneously subsidize leverage for their biggest advocates on the junior side of the pool.

Teams should be aware that a pool skewed greatly in favor of senior deposits can pose significant risk to junior depositors in the case of negative price performance.

Long-Tail Asset Speculators

On-chain options protocols have created somewhat liquid avenues for users to speculate on the price direction of blue chip digital assets, namely Bitcoin and Ether. These solutions do, however suffer, from an inefficient pricing of volatility relative to legacy solutions, as well as minimal secondary liquidity.

SMART Alpha junior and senior tokens provide perpetual exposure for users looking to express either positive or negative views on an upcoming week's price performance. While it is an inherently less capital efficient solution, it offers this functionality for any ERC-20 asset with a Chainlink price feed at a cheaper price.

Lending Platforms Seeking Low Volatility Collateral

Risk-averse users in search of low-volatility collateral could borrow against SMART Alpha senior tokens once secondary markets emerge to provide liquidity for liquidations as needed.

The downside protection offered to senior depositors varies epoch to epoch as a function of junior pool dominance.

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Last updated 3 years ago

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