Definition
Alpha is the first stage in acceptance testing of a product launch. In the context of DeFi, alpha is a key metric for capital market participants.
What is alpha in a software development lifecycle?
A software release life cycle involves different stages. It enables a community to offer input and suggestions, allowing for ideas and improvements to be discussed and incorporated before a final version of a product is released.
The software undergoes various tests during the alpha phase, which begins the production cycle and feedback loop. Developer teams prioritize this milestone as a means of a product’s iteration, which provides a better understanding of its efficiency and quality.
What is alpha in crypto?
Alpha is a statistical measure of excess returns for an investment strategy when compared with standard market benchmarks. Since capital markets are relatively efficient, it is very difficult to replicate alpha.
In the context of DeFi, various sources and mechanisms can produce alpha that differs from traditional markets due to the decentralization of DeFi protocols and current inefficiencies.
Takeaway
In the software development cycle, alpha is the first stage that involves fixing bugs and usability issues. Following the alpha stage, any features and functions are added to the software.
In DeFi, alpha refers to a measure of excess returns, akin to the traditional market benchmark but less nuanced due to the current inefficiencies.