Alpaca Finance, once a leading leveraged yield farming protocol on BNB Chain, has announced it will cease operations by December 31, 2025, marking the end of a four-year journey in the decentralized finance (DeFi) space.
Front-End Access Available Until Year-End
In a statement released Monday, the Alpaca Finance team confirmed that users will retain front-end access through the end of 2025 to allow for secure asset withdrawals.
“This choice wasn’t made lightly,” the team wrote. “But we believe it is the most responsible course of action to safeguard our community and ensure a graceful and secure wind-down.”
A DeFi Powerhouse During the 2021 Boom
Launched during DeFi’s explosive growth in 2021, Alpaca quickly became a cornerstone of the BNB Chain ecosystem, offering leveraged yield farming that allowed users to borrow funds and amplify liquidity pool (LP) returns.
At its peak, Alpaca Finance had over $1 billion in total value locked (TVL) and ranked among the most-utilized protocols on BNB Chain.
Sustained Losses and Binance Delisting Proved Fatal
Despite its early success, Alpaca faced mounting challenges. The protocol had been operating at a loss for over two years, relying solely on usage-based revenue and maintaining a fair launch model with no VC funding or pre-mined tokens.
The final blow came in late April, when Binance delisted ALPACA, the project’s native token. The move triggered a temporary 550% price rally due to short liquidations, including $55 million in forced closures in one day, but ultimately reduced token liquidity and accessibility.
Failed M&A Talks and Strategic Limitations
Alpaca explored mergers and acquisitions (M&A) with several DeFi projects to salvage the protocol, with some discussions reaching advanced stages. However, the market downturn in early 2025 led to these deals collapsing.
“We explored M&A discussions… but as the market turned downward again in early 2025, those deals fell through,” the team shared.
Conclusion: A Major DeFi Exit
With its token ALPACA now trading at around $0.08, down over 90% from its 2021 all-time high, the project will begin winding down all products, including automated vaults and decentralized perpetuals, in the coming months.
The closure of Alpaca Finance underscores the tough realities of sustaining a DeFi protocol in a highly competitive, capital-intensive environment.