After extensive internal deliberation and a thorough evaluation of possible paths forward, we have made the incredibly difficult decision to begin sunsetting Alpaca Finance and all of its products. This choice wasn’t made lightly, but we believe it is the most responsible course
Trading Secrets
27-05-2025 14:24
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ALPACA price crashes 45% as Alpaca Finance announces exit from DeFi space
Alpaca Finance, the leading lending protocol on Binance Smart Chain, has stunned the decentralized finance (DeFi) space by confirming plans to shut down its protocol and all related products.
Alpaca Finance gained popularity as it pioneered leveraged yield farming on the BNB Chain.
Thus, its decision raised eyebrows within the crypto community, and ALPACA’s price action highlights magnified user concerns.
The native token saw a sharp correction shortly after the announcement, crashing from $0.1607 to $0.09011 – a 44% dip.
However, Alpaca Finance’s team expressed gratitude and the protocol’s achievements through the four-year journey.
The announcement read:
Looking back, we’re incredibly proud of what Alpaca Finance achieved. 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.”
Evaluating Alpaca Finance’s legacy
Alpaca Finance witnessed impressive growth since its launch in early 2021.
The protocol gained traction due to leverage yield farming, which allowed individuals to magnify profits using borrowed funds.
Furthermore, its integration with Binance cemented Alpaca’s status in the DeFi market, propelling the protocol’s total value locked (TVL) past $900 million in April 2022.
Alpaca Finance gained traction due to its user-friendliness and massive branding, which featured Alpaca-themed mascots.
The team kept Alpaca Finance afloat in the past years with key integrations with several lending markets, launching automated vault strategies, and strong community backing.
However, increased competition within the DeFi space and changes in user preference have made it challenging for Alpaca Finance to sustain growth.
Protocols like Uniswap, AAVE, and Curve Finance have dominated the decentralized finance industry.
Alpaca Finance’s issues worsened in April as Binance discontinued support.
Such developments have seen its total value locked dip to $55 million at press time (DeFiLlama data)– an around 95% dip from early 2022 highs.
What’s next?
Indeed, uncertainty engulfs the Alpaca community.
Meanwhile, the team stated that it will communicate upcoming updates associated with the closure process via social media.
They have encouraged enthusiasts and holders to contact them for any questions and stay alert about any required actions and critical dates.
The team hasn’t revealed any plans to launch another project or exit the crypto space entirely.
Nonetheless, Alpaca Finance has left a lasting mark in the DeFi sector.
ALPACA price action
The native token exhibits significant bearishness at press time, hovering at $0.1063.
ALPACA’s 24-hour trading volume has increased by 200%, indicating magnified actions from traders likely capitalizing on the prevailing volatility.
The alt will likely crash further in the near term amidst prevailing vagueness.
Some holders may dump their assets to avoid more losses, while loyal Alpaca Finance followers wait for further updates from the team.
The protocol will gradually suspend its operations and close by Dec 31, 2025.
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