Alpaca Finance Wind-Down Announcement

The four-year journey of Alpaca Finance has seen two complete cycles of the crypto industry — the highs of bull markets and the sobering lessons of downturns. We’ve witnessed the rise of groundbreaking protocols and the fall of once-promising ventures. While we had hoped to be delivering better news today, the reality before us calls for a more somber tone.

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 of action to safeguard our community and ensure a graceful and secure wind-down.

🕕A walk down the memory lane

Alpaca Finance’s leveraged yield farming had an immediate product-market fit at launch in early 2021, as DeFi was blossoming on the BNB Chain. Within months, Alpaca became one of the cornerstone protocols on the BNB Chain. Along the way, we introduced numerous innovations and improvements, continuously pushing the boundaries of what we could offer our users. However, the launch of concentrated liquidity AMMs fundamentally shifted the landscape. With inherent leverage already embedded in these new models, traditional leveraged yield farming became significantly less compelling and much more difficult to do profitably.

Still, we didn’t stop building. We innovated with new iterations — Automated Vaults (AVs), a stablecoin (AUSD), and even a decentralized perpetual exchange (Alperp). Yet, throughout this period, the broader market remained muted. Suppressed yields and declining activities made these products increasingly unviable.

More recently, we explored strategic paths forward, including serious M&A discussions with several other projects. Some conversations progressed meaningfully, but ultimately, as the market turned downward again in early 2025, these deals fell through.

❓Why now?

Alpaca Finance was a fair launch project — no pre-mine, no VC funding — and our operational runway was always tied directly to protocol revenue. With TVL and yields declining, revenue followed suit. In truth, the team has been operating at a loss for over two years, even after significant downsizing of the team. Continuing under these conditions is simply not sustainable.

On top of that, the DeFi landscape has evolved dramatically. It’s more competitive, more saturated, and often favors large, capitalized players with new token supplies to give away. At this stage, we no longer see a viable opportunity within the team’s circle of competence that justifies further pursuit.

The recent delisting of ALPACA from Binance was another major blow. It not only limits token accessibility but also restricts our ability to deploy our remaining warchest effectively toward any new initiatives.

⚙️ The Sunset Process

In order to facilitate an orderly and secure winddown process for users’ assets, which is our highest priority, we have determined the following sequences for each product. If you have funds in Alpaca Finance, please read this section carefully.

AF1.0 (The original LYF)

• We will disable opening of new positions for all farms by the first week of June 2025.
• Users are strongly encouraged to close their positions as soon as possible. Any remaining active positions by 30 June 2025, will be automatically closed. Loans will be repaid and any remaining value will be returned to the position’s owner.

Automated Vaults (AV)

• We will stop all strategies immediately. Loans will be repaid; assets in the vaults will be converted into their base token (e.g., BNB saving vaults will have assets converted into BNB).

Alperp

• Immediately, Alperp will shift into a reduced-only mode (users can only reduce their positions’ sizes).
• Any remaining active positions will be automatically closed by 30 June 2025.

AF2.0 (Money Market)

• We will disable borrowing. Users are encouraged to repay their loans and close out their positions.
• Any remaining active positions will be automatically closed by 30 July 2025 (through changing borrowing factor to allow remaining positions to be repurchased).

Buyback & Burn

• Weekly buyback & burn will stop; the buyback portion of the revenue will be redirected to Governance Vault stakers for the remainder of operations.

Access to Alpaca Finance’s Front-End

• We are committed to maintaining and having the Alpaca Finance front-end running through 31st December 2025 to provide time for users to withdraw their assets conveniently.

🙏Thank you & Parting Words

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.

To our users, thank you for believing in us, farming with us, and sticking with us through the highs and lows.

To our team, past and present — thank you for your relentless dedication, integrity, and heart. This chapter wouldn’t have existed without you.

While Alpaca is coming to its final chapter, we hope our work leaves a small mark on the evolution of DeFi, and that the ideas and lessons we shared will continue to live on in future projects.

If you have any questions on the wind-down process, feel free to reach out to us. Any important updates during the wind-down process will be shared via our official social channels.

From all of us at Alpaca Finance — thank you for walking this journey with us. It’s been an honor.