Key Points
- Alpaca Finance will halt all operations by the end of 2025 due to a business model that is not sustainable in today’s DeFi market.
- The platform will deactivate all services, including yield farming and automated vaults, in the upcoming months.
- Users will have until December 31, 2025, to withdraw their assets before the platform shuts down completely.
Alpaca Finance, once a fundamental player on the BNB Chain and an innovator in leveraged yield farming, has revealed its plans to cease operations by the year-end 2025. This decision comes amidst challenges posed by a highly competitive and capital-heavy DeFi environment.
On Monday, the protocol announced its intention to gradually wind down all features, including their yield farming platform, automated vaults, and decentralized perpetual contracts, over the next few months.
Users will retain access to the platform through the end of December 2025, allowing time for asset withdrawals. “This choice wasn’t made lightly,” stated the Alpaca team. “Still, we are convinced that it is the most prudent decision to protect our community and ensure a smooth closure.”
Launched during the DeFi boom of 2021, Alpaca quickly established itself on the BNB Chain with its innovative yield farming strategies, enabling users to enhance yields by borrowing capital for liquidity farming.
At its peak, Alpaca managed more than $1 billion in total value locked (TVL) and ranked as one of the most utilized protocols on the chain.
Despite its initial success, Alpaca has been operating at a loss for over two years, primarily depending on protocol usage for revenue. The challenges are heightened by a fair launch model that involved no backing from venture capital or pre-mined tokens.
The last straw was a recent decision by Binance to delist ALPACA, the platform’s native token, which significantly hampered liquidity and restricted user access.
Although this triggered a temporary price surge of 550%, it was insufficient to stabilize the platform, leading to difficulties in exploring new opportunities or mergers. The team indicated, “We explored discussions for mergers and acquisitions with several projects, but those fell through as the market downturn worsened in early 2025.”
As of now, ALPACA is trading around $0.08, down over 90% from its all-time high in 2021.
