Alpaca Finance, once a staple of the BNB Chain ecosystem and a pioneer in leveraged yield farming, announced this week that it will sunset operations after a four-year run.
The decision marks the end of one of DeFi’s more resilient fair launch projects, and comes after sustained financial strain, evolving market dynamics, and a final blow from Binance.
In a blog published Monday, the team behind Alpaca described the closure as “incredibly difficult” but necessary to “safeguard our community and ensure a graceful and secure wind-down.”
The ALPACA token plunged 30% after the announcement, last trading around $0.112.
Yield Farming Pioneer Faced Growing Competition and Fading Demand
The announcement reflects how far the DeFi landscape has shifted since the project launched in early 2021, when its core product, leveraged yield farming, found near-instant product-market fit.
Back then, Alpaca quickly became one of the most used protocols on the BNB Chain. But as the market matured, and innovations like concentrated liquidity AMMs emerged with inherent leverage built in, traditional yield farming models lost appeal.
The team responded by launching new products, including Automated Vaults, the AUSD stablecoin, and a decentralized perpetual exchange called Alperp. Still, muted market conditions made profitability elusive.
Behind the scenes, Alpaca also explored merger and acquisition deals. While some progressed, none closed, especially after a renewed market downturn in early 2025. As the post explains, the protocol’s financial model, tied directly to revenue rather than venture capital, left it increasingly exposed.
“The team has been operating at a loss for over two years,” Alpaca wrote, adding that even significant downsizing could not reverse the trend.
Binance Delisting Dealt Final Blow as Alpaca Winds Down Operations
Then came a critical setback. Binance, the world’s largest exchange by volume, delisted the ALPACA token. That move, Alpaca said, limited access and also “restricted our ability to deploy our remaining warchest effectively.”
Combined with shrinking total value locked and falling yields, the writing was on the wall.
As part of the closure, Alpaca outlined a detailed wind-down timeline. Products like its original leveraged yield farming platform and Alperp will be fully shut down by late June or July 2025.
The front-end interface will remain active until the end of the year to allow users to withdraw funds. Buybacks and burns will cease, and governance stakers will receive the remaining protocol revenue.
Alpaca’s founders ended the note with gratitude. “From becoming a top protocol on BNB Chain, to helping define leveraged yield farming in DeFi’s early days, our journey was only made possible by the incredible support of our community,” they wrote.
Its closure shows the challenges DeFi protocols face in a maturing and increasingly competitive market, particularly those without VC backing or access to fresh capital.
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