AlphaFi Partners with Bucket Protocol: Strengthening Capital Efficiency on SUI

We’re excited to announce a strategic partnership between AlphaFi and Bucket Protocol, the #1 decentralized stablecoin on the SUI blockchain. This collaboration marks a significant milestone in AlphaFi’s long-term game plan, specifically aligning with our second core objective: Crafting Capital-Efficient DeFi Strategies.

What Does This Mean for AlphaFi Users?

This partnership unlocks new opportunities for AlphaFi users by enabling them to leverage their existing vault collateral to mint BUCK. This adds flexibility to users’ DeFi strategies by providing additional liquidity that can be deployed across the SUI ecosystem to generate more yield. The most immediate benefit will be the ability to mint BUCK against stablecoin vaults and earn on it, potentially boosting real yields by 5% APR or more by depositing the minted BUCK into our autocompounding BUCK vault.

Users can use minted BUCK in a variety of ways, such as depositing into our BUCK liquidity pool vaults, utilizing our BUCK autocompounding vault, or even deploying BUCK across other protocols within the SUI ecosystem. This not only enhances yield potential but also maximizes capital efficiency by allowing users to unlock liquidity from assets already held in AlphaFi vaults.

What is Bucket Protocol?

Bucket is a decentralized stablecoin protocol that allows users to mint BUCK, a USD-pegged stablecoin, by collateralizing digital assets. Unlike traditional stablecoins, BUCK is backed by over-collateralized assets such as SUI, Liquid Staking Tokens (LSTs), and other major crypto assets, ensuring a strong and secure peg to the US dollar.

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BUCK distinguishes itself from other stablecoins through its decentralized nature and innovative approach to maintaining its peg. Unlike centralized stablecoins such as USDT or USDC, which rely on reserves held by a central authority, BUCK achieves stability using smart contracts and collateral. Key mechanisms supporting BUCK’s stability include:

• Collateralized Debt Positions (CDPs): Users deposit collateral to create CDPs and borrow BUCK. A minimum collateralization ratio — typically 110% for stable assets and higher for non-stable assets — ensures that BUCK remains over-collateralized and backed.
• Peg Stability Module (PSM): Provides seamless 1:1 conversions between BUCK and other stablecoins like USDC and USDT, stabilizing the peg during price fluctuations.
• Recovery Mode: Activates additional liquidations when the total collateralization ratio falls below a critical threshold, incentivizing deposits to restore system stability.
• Liquidation & Redemption Mechanisms: Efficiently handle under-collateralized positions, maintaining solvency and allowing users to redeem BUCK for collateral at fair rates.

Through its decentralized model, BUCK enhances the overall transparency, accessibility, and reliability of stablecoins within the SUI DeFi ecosystem.

How This Partnership Elevates AlphaFi and BUCK

This collaboration not only drives AlphaFi’s mission but also plays a crucial role in expanding the BUCK ecosystem. As we integrate with Bucket Protocol, many new vaults will launch starting with the following:

1. BUCK Autocompounding Vault: AlphaFi will launch a single autocompounding vault to enhance BUCK yield for users. The vault will claim associated SUI rewards, swap them for more BUCK, and redeposit it into the vault, allowing users’ capital to grow. This compounding process occurs every 30 minutes or whenever a user deposits or withdraws from the vault, ensuring maximum efficiency and growth.
2. BUCK Liquidity Pools: We will launch new concentrated Liquidity Pool (LP) vaults, starting with BUCK-USDC and SUI-BUCK. These LP’s will be managed by our smart contracts to ensure they remain within the optimal range, maximizing yield and returns for users. All fees and rewards will be claimed every 30 minutes and compounded back into the vaults, further boosting user returns. This approach will deepen liquidity and help broaden BUCK’s adoption across the SUI ecosystem.
3. Minting BUCK Against Selected AlphaFi Vaults: Users will be able to borrow BUCK against their stablecoin vaults on AlphaFi. This feature adds flexibility, enabling users to access additional liquidity while maintaining exposure to their vault positions. More details will be shared on this prior to launch.

As AlphaFi facilitates greater minting and usage of BUCK, we anticipate significant growth in BUCK’s supply and adoption across the SUI network. This will not only strengthen BUCK’s liquidity but also reinforce its position as the leading decentralized stablecoin on SUI.

Why This Matters for AlphaFi’s Long-Term Vision

Our partnership with Bucket Protocol aligns with AlphaFi’s commitment to Crafting Capital-Efficient DeFi Strategies that prioritize safety, sustainable yields, and reliable returns. Integrating BUCK within AlphaFi helps us deliver on this promise by offering users a decentralized, stable, and flexible asset for their DeFi needs.

This collaboration also supports AlphaFi’s broader vision:

1. Building the Best Yield Aggregator on SUI: The introduction of BUCK vaults and liquidity pools strengthens our position as the go-to DeFi platform on SUI.
2. Enhancing Capital Efficiency: By enabling users to mint, stake, and use BUCK, we create more opportunities for capital-efficient strategies that perform well in all market conditions.
3. Innovating for the Ecosystem: As part of our long-term vision, we aim to build first-to-market products on SUI that benefit the entire ecosystem. Integrating with Bucket Protocol fosters growth for AlphaFi and supports broader DeFi adoption on SUI.

What’s Next?

We’ll be rolling out these features soon, along with detailed guides to help you make the most of this integration. Stay tuned for updates, and thank you for your continued support as we build a more efficient, sustainable, and innovative DeFi ecosystem on SUI.