Alpaca Finance, a prominent player in leveraged yield farming on the BNB Chain, will cease operations by the end of 2025. This decision, announced Monday, follows an extended period of unsustainable operations within an increasingly competitive and capital-intensive DeFi environment. The protocol’s shutdown will be phased, with all products—including its flagship yield farming platform, automated vaults, and decentralized perpetuals—gradually winding down over the coming months. Users will retain front-end access until December 31, 2025, to facilitate asset withdrawal.
The Alpaca team emphasized that this decision was not taken lightly, prioritizing community safety and a secure, orderly wind-down. Launched during the 2021 DeFi boom, Alpaca quickly gained traction on BNB Chain, offering leveraged yield farming strategies that amplified returns through borrowed capital for liquidity pool (LP) token farming. At its peak, the protocol boasted over $1 billion in total value locked (TVL), solidifying its position as a leading protocol on the chain.
However, Alpaca had been operating at a loss for over two years. Revenue directly correlated with protocol usage, a challenge exacerbated by its fair launch structure—lacking venture capital backing or pre-mined tokens. The delisting of ALPACA, the protocol’s native token, by Binance in late April proved a critical turning point. While initially causing a dramatic 550% price surge due to short liquidations (including $55 million in forced closures within a single day), this event severely hampered liquidity and user access to the token.
This restricted access significantly hindered the pursuit of new initiatives or strategic mergers. Despite exploring several M&A opportunities, these efforts ultimately failed as market conditions deteriorated in early 2025. ALPACA’s token currently trades around $0.08, a significant 90% decline from its all-time high in 2021. The shutdown marks the end of an era for Alpaca Finance, highlighting the challenges faced by DeFi projects in navigating a volatile market and evolving competitive landscape.
