Stella

About Stella (ALPHA)

Stella is a leveraged DeFi protocol, previously known as Alpha Finance Lab, that offers leveraged yield strategies with "0% cost to borrow": borrowers pay no interest and instead share part of the yield they earn with lenders. ALPHA is its token, used for staking, protocol fee sharing and governance. It matters because the same team built Alpha Homora, one of the first leveraged yield farming protocols on Ethereum, and Stella is its attempt to rethink how on-chain leverage is priced.

What Is Stella?

Stella has two core products, according to its documentation:

• Stella Strategy, where users (called "leveragoors") open leveraged positions in yield strategies without paying borrowing interest
• Stella Lend, where lenders deposit assets into pools and receive a share of the yields generated by those leveraged positions

The live app at stellaxyz.io shows Strategy and Lend sections on Arbitrum. In 2025 the team announced Stella Trade, a perpetual futures exchange that went live on Berachain testnet, as its next product line.

Who Founded Stella? (History)

The project started as Alpha Finance Lab, which built Alpha Homora, described by Stella as the first leveraged yield farming protocol on Ethereum, with a peak total value locked of about $1.9 billion. The team says ALPHA was named Binance Launchpad project of the year in 2021, and the token sale included allocations through Binance Launchpad and Launchpool.

In February 2021, Alpha Homora V2 was exploited for about $37.5 million, as reported by the security publication rekt.news.

In June 2023 the project rebranded to Stella while keeping the ALPHA ticker, as confirmed in a KuCoin notice dated 8 June 2023. The Stella FAQ says the core contributors stayed the same, naming Tascha as project lead, Nipun as tech lead and Arin as product lead. In June 2024 the team published a proposal to pivot and rebrand to "LitLayer," a leverage infrastructure protocol; later 2025 posts still use the Stella name, which suggests the rebrand did not proceed as proposed (our inference).

How Stella Works

Stella replaces the usual utilization-based interest rate model with a Pay-As-You-Earn (PAYE) model:

1. A leveragoor borrows from a Stella Lend pool to open a leveraged position in a supported yield strategy.
2. No interest accrues on the loan, regardless of pool utilization.
3. When the position earns yield, a "yield cut" defined by a PAYE curve is taken from the earnings.
4. That yield cut is shared with lenders, and 20% of it is collected as protocol fees.

The idea is that borrowers pay only when they profit, while lenders' returns are tied to real strategy performance instead of to utilization spikes. Positions are still over-collateralized and can be liquidated if they fall below required thresholds.

Key Ecosystem Components

• Stella Strategy and Stella Lend on Arbitrum
• Stella Trade, a perpetuals venue combining a central limit order book with a just-in-time request-for-quote auction for market makers (testnet on Berachain, per the 2025 announcement)
• ALPHA staking at staking.stellaxyz.io
• Legacy Alpha Homora products, whose depositors receive part of Stella's protocol fees
• Open-source code on GitHub

ALPHA Token Utility

According to the Stella docs, ALPHA holders can stake to receive sALPHA, which gives:

• a share of protocol fees: 50% of fees go to ALPHA stakers and 50% to Alpha Homora depositors
• tokens from projects the team previously incubated, when those become available
• voting rights on protocol proposals

Staked funds act as a backstop for the protocol. Rewards auto-compound, and unstaking carries a 30-day unbonding period followed by a 72-hour claim window.

Tokenomics from the docs: a total supply of 1,000,000,000 ALPHA, allocated 36.67% to ecosystem, 20% to liquidity mining, 15% to team and advisors, 13.33% to the private sale, 10% to the Binance Launchpad sale and 5% to Binance Launchpool. ALPHA exists on Ethereum and BNB Chain (same address 0xa1faa113cbe53436df28ff0aee54275c13b40975), on Avalanche as ALPHA.e and on Arbitrum.

What Makes Stella Unique?

The PAYE model is the key difference. Most lending and leverage protocols charge borrowers a floating interest rate whether their position earns or not. Stella ties the cost of borrowing to realized yield, which the team argues aligns lenders and borrowers. The team's history with Alpha Homora, including leveraged liquidity provision on Uniswap v3, gives it long experience in this niche.

How Stella Differs from Similar Chains

Stella is an application, not a chain. Compared with money markets such as Aave or Radiant Capital, it replaces interest rates with yield sharing. Compared with yield-trading protocols such as Pendle, it focuses on leverage rather than splitting yield into tradable parts. With Stella Trade it also moves toward perpetuals venues such as GMX.

Use Cases of Stella

• Opening leveraged positions in yield strategies without interest costs
• Lending assets to earn a share of leveraged strategy yields
• Staking ALPHA for fee sharing and governance
• Trading perpetuals on Stella Trade once it launches beyond testnet

How Stella Is Secured

The Stella docs list audits by PeckShield and Trust Security, with reports published in the project's audits repository. The protocol also documents a risk framework with precautionary measures and a "slow mode," and staked ALPHA serves as a backstop. The 2021 Alpha Homora V2 exploit is a reminder that leveraged DeFi contracts are complex and carry real smart contract risk.

Risks and Considerations

• Leveraged positions can be liquidated in fast markets.
• Smart contract risk remains despite audits, as the 2021 exploit showed.
• The official documentation site now redirects to a non-public page, making current details harder to verify.
• Protocol fee income to stakers depends on usage, which has been much smaller than in the Alpha Homora era.
• The strategic direction has shifted several times (Alpha Homora, Stella, a LitLayer proposal, Stella Trade).

Why Stella Matters

Stella is one of the longest-running teams in DeFi leverage, and its PAYE model is a distinct experiment in how borrowing should be priced. Its shift toward perpetuals reflects where on-chain leverage demand has moved.

Where Can You Buy Stella?

ALPHA trades on centralized exchanges and on decentralized exchanges on Ethereum, BNB Chain and Arbitrum.

Storage Options After Purchase

ALPHA can be held in any EVM wallet such as MetaMask or a hardware wallet, on the chain where you bought it. Verify contracts on Etherscan, BscScan or Arbiscan. Staking is done on Ethereum mainnet through the official staking page.

Related Coins

• Aave (AAVE)
• Pendle (PENDLE)
• Radiant Capital (RDNT)
• GMX (GMX)
• Arbitrum (ARB)