Alpaca Finance Integrates Chainlink Price Feeds to Maximize Security of Leveraged Yield Farming on BNB Chain
Bolstered by low costs and high transaction speeds, BNB Chain has seen an explosion of DeFi protocols launched on its blockchain, and Alpaca Finance has become one of the homegrown blue-chip leaders.
From passive yield opportunities to single asset leveraged yield farming, we senior alpacas have been committed to creating new yield opportunities and maximizing returns for all you alpacas in our herd. As a result, the total value locked (TVL) in Alpaca Finance has continued to increase, sitting at $1.2 billion dollars now, as users continue to flock to the platform to put their assets to work earning safe yields on BNB Chain.
Yet, as much as we love profitability, we place one thing even higher than that in importance — and that’s security.
That’s why in order to increase the security of user funds to match our growing TVL, we’re excited to announce that we have integrated Chainlink Price Feeds — the industry standard for decentralized price oracles, which secure tens of billions of dollars in TVL across DeFi.
Chainlink Price Feeds are time-tested and well known for supplying high-quality price data with multiple layers of decentralization to protect user funds from unexpected situations like exchange downtime, flash crashes, and data manipulation attacks like flash loans. With Chainlink Price Feeds as our primary oracle solution and in-house security programs such as Oracle Guard and regular security audits as secondary protections, our multiple layers of security will help you alpacas to do what you love most: farm sky-high yields without worrying about any security risks or schemes from those no-good hacking and fudding llamas!
Our initial integration with Chainlink Price Feeds includes the following trading pairs: CAKE-BNB, BTCB-BNB, ETH-BNB, USDT-BUSD, BNB-BUSD, DOT-BNB, LINK-BNB, YFI-BNB, VAI-BNB, USDC-BUSD, DAI-BUSD, BTCB-BUSD, BNB-USDT, CAKE-BUSD, and ETH-BUSD. Since Chainlink Price Feeds are easy to integrate and blockchain-agnostic, we also plan to scale support for new trading pairs and across new blockchains in the future as part of our ambitious roadmap.
Securing Leveraged Yield Farming With Chainlink
Alpaca Finance is a BNB-Chain-based leveraged yield farming protocol that offers the most capital efficient lending/borrowing through platform-controlled undercollateralized loans. Users can maximize the value of their assets through various farming strategies while lenders can safely earn passive income by providing liquidity to the borrowers who want to amplify their farming position sizes and resulting yields.
Our current product suite incorporates a variety of staking and yield farming options to match the risk preferences of any alpaca. For example, our Lend option provides a low-risk way to earn the highest lending yields on the market.
Even without leverage(1x), our auto-compounding farms also offer the highest APYs on most pairs on BNB Chain because we have the lowest fees.
Meanwhile, our leveraged yield farms offer some of the highest APYs in DeFi due to our unique application of undercollateralized loans:
We even offer some unique products that allow you to leveraged farm single-assets:
Or earn yields shorting while leveraged farming!
You can even combine long+short positions to hedge neutral while yield farming!
Anyway, the point is there are lots of ways for alpacas to profit. Having said that, though our products offer impressive yields on their own, these optimized yields come from strategies that connect with top external AMM protocols like PancakeSwap and WaultSwap.
To give an example, an alpaca can go to our platform and supply one-sided liquidity of any amount to any one of dozens of farming pairs from these AMMs, then choose how much they want to borrow to leverage up their farming position up to 6x. The Alpaca Finance protocol then loans them these funds from a corresponding lending pool, before deploying them as liquidity into the liquidity mining pool on the AMM. From there, the Alpaca protocol continuously reinvests and auto-compounds the returns, letting the aforementioned alpaca take a nap on the grass as it earns profits in its sleep, counting alpacas and counting yields…
In this manner, Alpaca Finance works as an enabler for the entire DeFi ecosystem, amplifying the liquidity layer of integrated exchanges, improving their capital efficiency by connecting LP borrowers and lenders. It’s through this empowering function that Alpaca has become a fundamental building block within DeFi, helping bring the power of finance to each and every person’s fingertips, and every alpaca’s paw…
Yet, we senior alpacas take our math seriously too. In order to calculate proper collateralization ratios during loan issuance and for liquidation events of leveraged yield farm positions, the protocol needs to access precise, tamper-proof, and consistently up-to-date on-chain price feeds. Ideally, price data should also reflect a volume-weighted average across all trading platforms for assets in a trading pair, including the use of multiple data providers and numerous node operators for fetching and delivering the data on-chain without downtime or manipulation.
Well, it was clear from researching various solutions that Chainlink was the best and only option for price feeds to secure the funds of our alpacas. Chainlink Price Feeds offer a multitude of attractive features that instill strong confidence in securing Alpaca Finance’s on-chain functions:
- High-Quality Data — Chainlink Price Feeds source data from numerous premium data aggregators, leading to price data that’s aggregated from hundreds of exchanges, weighted by volume, and cleaned from outliers and wash trading. Chainlink’s data aggregation model generates accurate global market prices that are inherently resistant to inaccuracies or manipulation of any single or small set of exchanges.
- Secure Node Operators — Chainlink Price Feeds are secured by independent, security-reviewed, and Sybil-resistant oracle nodes run by leading blockchain DevOps teams, data providers, and traditional enterprises. Chainlink nodes have a strong track record for reliability, even during high gas prices and large infrastructure outages.
- Decentralized Network — Chainlink Price Feeds are decentralized at the data source, oracle node, and oracle network levels, generating strong protections against downtime and tampering by either the data provider or the oracle network.
- Reputation — Chainlink provides a robust reputation framework and set of on-chain monitoring tools that allow users to independently verify the historical performance of node operators and oracle networks, as well as check the real-time prices being offered.
“Our integration with Chainlink was crucial to maintaining Alpaca’s values of transparency, security, and reliability,” stated James Strudwick, Head of BD of Alpaca Finance. “Chainlink Price Feeds provide our smart contracts with price data that has extensive market coverage and oracle infrastructure that’s battle-hardened in production, enhancing the security of user funds deposited on the platform. Additionally, Chainlink is blockchain-agnostic, supporting our scaling ambitions while reducing the load on our development team — empowering us to focus on creating more advanced yield farming strategies for our alpacas.”
Chainlink is the industry standard oracle network for powering hybrid smart contracts. Chainlink Decentralized Oracle Networks provide developers with the largest collection of high-quality data sources and secure off-chain computations to expand the capabilities of smart contracts on any blockchain. Managed by a global, decentralized community, Chainlink currently secures billions of dollars in value for smart contracts across decentralized finance (DeFi), insurance, gaming, and other major industries.
Chainlink is trusted by hundreds of organizations, from global enterprises to projects at the forefront of the blockchain economy, to deliver definitive truth via secure, reliable oracle networks. To learn more about Chainlink, visit chain.link and subscribe to the Chainlink newsletter. To understand the full vision of the Chainlink Network, read the Chainlink 2.0 whitepaper. Want to discuss an integration? Talk to an expert.
About Alpaca Finance
Alpaca Finance is the largest lending protocol allowing leveraged yield farming on BNB Chain. It helps lenders to earn safe and stable yields, and offers borrowers undercollateralized loans for leveraged yield farming positions, vastly multiplying their farming principals and resulting profits.
As an enabler for the entire DeFi ecosystem, Alpaca amplifies the liquidity layer of integrated exchanges, improving their capital efficiency by connecting LP borrowers and lenders. It’s through this empowering function that Alpaca has become a fundamental building block within DeFi, helping bring the power of finance to each and every person’s fingertips.
Furthermore, alpacas are a virtuous breed. That’s why, we are a fair-launch project with no pre-sale, no investor, and no pre-mine. So from the beginning, this has always been a product built by the people, for the people. Or as we like to say: by the alpacas, for the alpacas.