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Alpaca Finance, a decentralized finance (DeFi) protocol on BNB Chain and Fantom, has announced its gradual shutdown.
Author: Sahil Thakur
Written On: Tue, 27 May 2025 06:31:35 GMT
Alpaca Finance, a decentralized finance (DeFi) protocol on BNB Chain and Fantom, has announced its gradual shutdown. The team revealed the decision on May 26, citing long-term financial difficulties and increased competition.
In a public statement, the Alpaca team explained that operations have been running at a loss for more than two years. Despite significant downsizing, the protocol could not return to profitability.
“With TVL and yields declining, revenue followed suit,” the team said. “Continuing under these conditions is simply not sustainable.”
Alpaca Finance once reached a peak total value locked (TVL) of over $900 million in early 2022, according to DefiLlama. That number has since dropped to about $54.6 million, reflecting shrinking user activity and market share.
The announcement comes a month after Binance delisted ALPACA, the project’s native token. The team called the move a “major blow,” stating it reduced the token’s accessibility and hampered strategic flexibility.
While ALPACA briefly surged over 1,000% after the delisting, the rally quickly reversed. The token dropped by more than 30% in the past day and was last trading around $0.11.
Market observers speculated the price spike was driven by manipulation or speculative trading rather than fundamentals.
Alpaca Finance has laid out a detailed plan to wind down services:
Additionally, the protocol will terminate its buyback and burn program. Any remaining revenue will be distributed to Governance Vault stakers.
The DeFi landscape has become increasingly saturated and competitive. According to Alpaca, newer protocols with strong token incentives and larger treasuries have made it harder for legacy platforms to survive.
“The market now favors big, well-funded players,” the team said.
Binance did not publicly state why it removed ALPACA, but such decisions usually follow a review of trading volume, project development, and community engagement.
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