Alpaca Finance, Once a DeFi Giant on BNB Chain, Will Shut Down
Alpaca Finance, a pioneering DeFi platform on the BNB Chain, has announced that it will be ceasing operations by the end of 2025. The decision comes as a result of an unsustainable business model in the face of increasing competition and capital requirements in the DeFi space.
In a statement released on Monday, the protocol revealed that it will be winding down all of its products, including its yield farming platform, automated vaults, and decentralized perpetuals, over the coming months. Users will have until December 31, 2025, to withdraw their assets from the platform.
The team at Alpaca acknowledged that the decision to shut down was a difficult one, but ultimately necessary to protect the interests of the community and ensure a smooth transition out of the market. Since its launch during the DeFi boom of 2021, Alpaca had become a prominent player in the BNB Chain ecosystem, with over $1 billion in total value locked at its peak.
However, despite its initial success, Alpaca had been operating at a loss for over two years, with revenue heavily reliant on protocol usage. This challenge was exacerbated by the project’s fair launch structure, which lacked VC backing or pre-mined tokens.
The final blow for Alpaca came when Binance delisted its native token, ALPACA, in late April. While the delisting initially led to a price rally, it also severely limited liquidity and user access to the token, making it difficult for the project to pursue new initiatives or strategic partnerships.
Despite exploring potential mergers with other projects, the team at Alpaca was unable to secure any deals as the market downturned in early 2025. As a result, ALPACA’s token price plummeted by over 90% from its all-time high in 2021, trading at just $0.08 at the time of the announcement.
The closure of Alpaca Finance marks the end of an era for the DeFi ecosystem on the BNB Chain. As the industry continues to evolve, it serves as a reminder of the challenges faced by projects operating in a rapidly changing and competitive landscape.
