Coin Guide: Alephium ($ALPH)

Alephium (ALPH) is a Layer-1 blockchain network leveraging sharding, Proof-of-Less-Work, and a custom virtual machine designed to address the shortcomings of existing L1 solutions. The blockchain is being developed to support high-performance decentralized applications (dapps), smart contracts, and decentralized finance (DeFi) protocols. 

This guide will give you the complete rundown on Alephium and how to buy it on Houdini Swap. 

What is Alephium?

Launched in 2019 and headquartered in Neuchâtel, Switzerland, Alephium utilizes blockflow sharding to support a throughput of up to 10,000 transactions per second, while using as little as an eighth of Bitcoin’s energy consumption. The project is helmed by Cheng Wang, Alephium founder and core developer renowned in the sector for proposing the first linear-time async Byzantine consensus algorithm. 

Alephium is a distinctive Layer-1 blockchain protocol that amalgamates Bitcoin’s core technology infrastructure such as its Proof-of-Work (PoW) consensus mechanism and its Unspent Transaction Output (UTXO) model, while introducing sophisticated sharding techniques that allow it to boost scalability and energy efficiency compared to other L1 platforms. Here’s a closer look at Alephium’s key features.

What are the key features of Alephium?

• Scalable/sharded architecture. Alephium is based on a novel sharding algorithm called BlockFlow, which enables the network to support over 10,000 TPS and provide a seamless UX that works similar to a single-chain model despite its sharded architecture.
• Enhanced energy efficiency. Thanks to Alephium’s Proof-of-Less-Work consensus algorithm, the blockchain uses 87% energy consumption compared to proof-of-work blockchains like Bitcoin. This way, more users can run full nodes and aid the network in achieving a greater degree of decentralization. 
• Improved programmability and security. Alephium uses a stateful UTXO model that enables the development of secure, complex smart contracts and decentralized apps.
• Unique virtual machine and programming language. Alephium uses its own virtual machine and programming language built to improve developer UX and blockchain security. Thanks to its built-in measures to prevent common vulnerabilities and attack vectors, it opens up a new world of possibilities for smart contracts and everything in between. In doing so, Alephium positions itself squarely as a competitor to Ethereum and its outdated Ethereum Virtual Machine.

What are the use cases of Alephium?

Alephium utilizes a stateful UTXO model to support secure, programmable smart contracts and decentralized apps on its native blockchain. By being the first operational sharded Layer-1 blockchain, Alephium scales and iterates on the existing PoW and UTXO paradigm, creating a better, faster, and more energy-efficient solution than Ethereum or Solana.

Here’s how the following use cases for Alephium by user category:

Users/Investors

• Hold and use ALPH tokens. Investors can hold the protocol’s native token ALPH as an investment or use them to interact with decentralized apps and protocols on the Alephium ecosystem.
• Run Alephium nodes. Users can help secure the network and maintain its decentralization by running a node to validate transactions on the Alephium blockchain and earn ALPH tokens in the process.:
• Mining Alephium tokens. Alephium uses the Blake3 hashing algorithm allowing users to mine and help secure the network and receive ALPH tokens as a reward.
• Trade ALPH tokens. ALPH tokens can be traded on a variety of centralized and decentralized exchanges, including Houdini Swap, allowing users to speculate, provide liquidity, and grow the Alephium ecosystem in the process.

How to store Alephium tokens?

You can store Alephium tokens on the exchange you bought them from, or you could store them using Alephium’s own non-custodial wallet. You can also store them on non-custodial wallets like Metamask. Here’s a quick rundown on how to store your ALPH tokens based on your preferences. 

Storing Alephium on a centralized exchange

Alephium is available on several centralized exchanges such as MEXC, Bitget, and Gate.io. Storing your digital assets on an exchange gives you the most convenient access to liquidity, financial products, and spot/futures trading functionality. Most centralized exchanges also offer a variety of staking and lending products you can use to get more value out of your cryptoassets. 

Using a CEX means you won’t have to manage and secure your private keys, as the exchange will do that for you. If you prefer convenience over full custody, choose this option. Make sure that your exchange is trustworthy and that you implement multi-factor authentication to protect your assets from theft.

Storing Alephium in a non-custodial wallet

Security-focused users, on the other hand, will prefer retaining full custody over their digital assets by storing Alephium in a non-custodial wallet. Storing ALPH using Alephium Wallet, Metamask, or a hardware wallet that supports it is a better option for individuals who wish to hold their ALPH tokens over the long haul. 

However, this option may be less convenient if you plan to trade ALPH frequently or use them in a variety of investment products offered by CEX solutions. If you choose to store ALPH using a non-custodial wallet, make sure to store your private keys in a secure location. Unlike storing tokens on a centralized exchange, there is no way to recover your account and its assets if you lose your non-custodial wallet’s private keys. 

How to store Alephium using the Alephium wallet

If you plan to go this route, here’s how to store your ALPH tokens using the Alephium Wallet browser extension for Chrome and Firefox. The wallet provides a secure, non-custodial and intuitive way to store and manage your ALPH tokens and other digital assets as well as interact with dapps.on the Alephium blockchain.

1. Install the Alephium Wallet browser extension. Go to the Chrome Web Store or the Firerox Add-Ons website and search for the Alephium Wallet browser extension. 
2. Download and install the add-on.. Click “Download” and install the extension using the on-screen prompts as guidance. It should then appear under your chosen browser’s extensions or add-ons. 
3. Create your Alephium Wallet. Click on the Alephium Wallet icon and select “New wallet” to create your Alephium-native crypto wallet, and set a password. Voila! Now you can transfer your ALPH tokens and store them securely on the Alephium blockchain. You can also interact with Alephium-native dapps and protocols using the Alephium Wallet without needing to bridge them every time. 

You can now use your Alephium wallet to connect to decenetralized apps and services on the Alephium blockchain natively. 

How to stake Alephium?

At the time of writing, Alephium doesn’t offer native staking on its blockchain since it operates using the Proof-of-Less-Work consensus mechanism (unlike blockchains that use proof-of-stake). However, DeFi protocols and liquidity pools running on the Alephium blockchain could offer staking and yield farming opportunities, as may centralized exchanges that offer investment products featuring Alephium. 

What dapps can you use with Alephium?

Here are some of the most commonly-used decentralized apps on the Alephium blockchain:

• Alephium Decoder. Alephium Decoder is a tool that helps developers and users pore through raw data for contracts and transactions made on the Alephium blockchain. It can also provide a replay of transaction instructions at the Virtual Machine level.
• Alephium Explorer. Alephium Explorer is the blockchain explorer that leverages on-chain data to show $ALPH token development and usage on the Ethereum blockchain.
• Alephium Name Service. ANS is the open-source name service on Alephium, where you could purchase a distinct name for your Alephium wallet address and link it to your wallet. It functions the same way as Ethereum Name Service (ENS) does.
• AlphPad. AlphPad is a launchpad platform enabling developers to securely and efficiently launch projects on the Alephium blockchain while simultaneously connecting them with potential investors under one platform. 
• Grumpy Fortunes. Grumpy Fortunes is a meme coin recently launched on the Alephium blockchain last May. The project also includes a series of unique video NFTs abd developed an AI-powered oracle on Alephium using its dapp called Grumpy Fortunes. Users can get AI-driven price predictions for Alephium.
• What The Duck. A GameFi project on Alephium featuring a flock of 128 generative AI ducks. The project features the first game on the Alephium blockchain called Quack Attack, where players can engage in battles and level up their charges in an interactive online world.

(as of October 2024)

How to stay safe when using Alephium

The following is a list of practical tips to stay safe when using Alephium and interacting with dapps on the Alephium blockchain. 

• Use hardware / cold wallets. Hardware wallets are physical devices that store your private keys and crypto offline, making them more secure than keeping them on a “hot” wallet. 
• Use multi-factor authentication. Multi-factor authentication adds an added security layer that makes it harder for threat actors to gain unauthorized access to your account even when your password has been compromised.
• Don’t blindly invest in tokens endorsed by influencers. Don’t take investment advice from influencers promoting specific tokens. Always do your own research before investing in any project instead of relying solely on hype or endorsements. 
• Keep a close eye on website URLs. Double-check URLs before entering login credentials or connecting your wallet to avoid phishing scams that use fake websites to trick users into revealing their personal information. Avoid clicking on suspicious emails asking you to connect your wallet or log in to your accounts. 
• Make sure your crypto wallet is secure. Use a reputable Alephium wallet provider with a trustworthy track record.

What are the future prospects of Alephium?

Alephium’s sharding and proof-of-less-work energy-efficient consensus mechanism provides a strong foundation for developers to build scalable, sustainable decentralized apps with significantly lower environmental footprint.

Additionally, Alephium distinguishes itself as a project with its sharded architecture and tailored programming language, making it a future contender in the smart contract and decentralized app development sector.

Alephium is continuing to build out its ecosystem by improving support for hardware wallets, promoting more dapp development, and running the first-ever Alephium Hackathon in the near future. Community-wise, the protocol is launching an Ambassador program designed to bring more eyes to the project, which will coincide with additional CEX and DEX listings that will drive demand for its native token $ALPH. 

Recently, Alephium completed its Rhône upgrade which went live on its testnet in May 2024, which is designed to improve network performance with reduced block times, gasless transactions, and improved security. The project’s dapp ecosystem is rapidly evolving as Alephum builds out its essential primitives that will serve as the bedrock of its future development. 

How to buy Alephium on Houdini Swap

Liquidity aggregators such as Houdini Swap offer a way to purchase Alephium using a non-KYC, secure, and private manner. Houdini Swap, for instance, adds a higher degree of privacy than using conventional DEXes, not to mention offering over 8 million crypto pairs to buy, sell, trade, swap, or bridge from—directly through the platform’s intuitive interface. Here’s how to use Houdini Swap to buy Alephium:

1. Go to the Houdini Swap website.Head over to the official Houdini Swap website.
2. Select your desired transaction. Houdini Swap offers standard swap transactions as well as private swap transactions. Both offer heightened privacy compared to conventional DEX swaps, with the private swap option offering the highest degree of privacy.
3. Select your desired crypto pair. Select the type of token to send (“from”) and the type of token you wish to receive (“to”). In this case, you’ll need to have existing crypto to swap from into Alephium. 
4. Enter the amount of tokens you wish to swap for Alephium. Indicate the amount of Alephium you wish to receive or the amount of tokens you wish to swap from. Houdini Swap will then pull rates from a variety of its exchange partners and select the lowest cost swap out of the available ones. 
5. Enter the receiving wallet address. Enter the receiving wallet address and make sure that it is on the same network as the receiving token. 
6. Finalize the transaction. Once you’ve double-checked the crypto pair, amount, and wallet address, hit “Swap” to confirm your transaction. If you choose to connect your wallet to Houdini Swap, finalize the transaction in your wallet. If you opt to swap without connecting your wallet, send the specified amount of cryptocurrency to the wallet address that Houdini Swap provides. 
7. Track the status of the transaction. Standard swaps take less than 5 minutes, while private swaps take around 20 to 30 minutes to complete. 

Alephium ($ALPH) is available on Houdini Swap.