Alpaca Finance, an early leader in leveraged yield farming, will shut down by the end of 2025

The protocol will begin winding down all products, including its original yield farming platform, automated vaults, and decentralized perpetuals

Alpaca Finance, a popular leveraged yield farming protocol on BNB Chain, will shut down operations by the end of 2025, the team announced Monday.

The protocol will begin winding down all products, including its original yield farming platform, automated vaults, and decentralized perpetuals, over the next few months. Front-end access will remain available through December 31, 2025, to give users time to withdraw their assets.

"This choice wasn’t made lightly, but we believe it is the most responsible course of action to safeguard our community and ensure a graceful and secure wind-down," the Alpaca team wrote.

Launched during DeFi's 2021 boom, Alpaca quickly rose to prominence on BNB Chain for its unique leveraged yield farming strategies. Users could amplify returns by borrowing capital to farm LP tokens, aiming to maximize gains in both DeFi and cryptocurrency markets.

At its peak, Alpaca held over $1 billion in TVL and was one of the most-used protocols on the chain. It also launched a decentralized perpetuals exchange, aiming to provide traders with advanced derivatives products.

However, the protocol faced increasing difficulties sustaining its business model in a more competitive and capital-intensive DeFi landscape.

Internal numbers showed that Alpaca had been operating at a loss for over two years, with revenue tied directly to protocol usage. This challenge was further amplified by the project’s fair launch structure, which saw no VC backing or pre-mined tokens to support the project.

The final blow came in late April, when Binance delisted ALPACA, rendering it harder to pursue new initiatives or strategic mergers.

"We explored M&A discussions with several projects, and some progressed meaningfully," the team said. "But as the market turned downward again in early 2025, those deals fell through."

ALPACA is currently trading at around $0.08, having lost over 90% of its value from its all-time high in 2021.