Alpaca Finance has announced that it is shutting down all operations after four years in the decentralized finance space. The team confirmed the decision in an official statement, citing declining revenue, market changes, and unsuccessful acquisition talks as key factors behind the closure.
The shutdown process will be conducted in stages over the next several months, with all services expected to fully cease by the end of 2025. Users have been advised to withdraw their funds and close any active positions within the provided timelines.
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Background: From Growth to Decline
Launched in early 2021, Alpaca Finance initially gained traction as a leveraged yield farming protocol on the BNB Chain. The platform quickly became one of the major DeFi projects on the network, benefitting from strong demand and the wider growth of decentralized finance at the time.
Over the years, Alpaca introduced additional products, including Automated Vaults (AVs), the AUSD stablecoin, and a decentralized perpetuals platform called Alperp. However, changes in DeFi infrastructure – particularly the introduction of concentrated liquidity automated market makers (AMMs) – reduced the appeal of traditional leveraged yield farming.
Despite continued development, the platform experienced declining activity and yield opportunities. According to the team, revenue dropped significantly, making ongoing operations unsustainable.
Failed Acquisition Attempts and Binance Delisting
In recent months, Alpaca Finance engaged in discussions regarding potential mergers and acquisitions with other crypto projects. Some talks reportedly progressed, but ultimately fell through in early 2025 due to worsening market conditions.
Another critical factor was the delisting of ALPACA, the platform’s native token, from Binance. The team said this limited accessibility to the token and constrained efforts to deploy remaining funds toward new initiatives.
Without VC backing or pre-mined funds, Alpaca’s operational resources were directly tied to protocol revenue. With total value locked (TVL) and user activity down, the platform had reportedly been operating at a loss for more than two years, even after significant downsizing.
Market Impact and Token Performance
Following the shutdown announcement, the ALPACA token saw a steep decline in value. Within 24 hours, it dropped nearly 30% and is now trading below $0.12 – a significant fall from its late April peak of around $1.
The token had already been under pressure since its delisting from Binance earlier this month. That event triggered a sustained downtrend, which was further accelerated by today’s confirmation that Alpaca Finance will be closing all operations.
Shutdown Timeline and Instructions for Users
Alpaca Finance has shared a detailed timeline outlining how each of its products will be phased out. For the original leveraged yield farming platform, known as AF1.0, the opening of new positions will be disabled during the first week of June 2025. Any positions still open by June 30 will be automatically closed, with loans repaid and any remaining value returned to the respective users.
Automated Vaults (AV) have already had all strategies halted. Assets within the vaults will be converted to their base tokens – for example, BNB for BNB vaults – and returned to users.
The perpetual exchange product, Alperp, is now operating in reduce-only mode, which means users can only decrease their open positions. Like AF1.0, any positions still active by June 30 will be closed automatically.
In the AF2.0 money market product, borrowing has been disabled. Users are encouraged to repay outstanding loans and exit their positions. If any positions remain open by July 30, they will be closed by adjusting borrowing parameters to allow for their repurchase and settlement.
Alpaca Finance has also ended its weekly buyback and burn program. Moving forward, the buyback portion of protocol revenue will instead be redirected to Governance Vault stakers for the duration of the shutdown period.
The platform’s front-end will remain operational until December 31, 2025. This is intended to give users enough time to access the site and withdraw their assets without disruption.
According to the team, the highest priority during the shutdown is to ensure user assets are withdrawn securely and without complications. Regular updates will be communicated through Alpaca Finance’s official channels throughout the process.
The End of Alpaca Finance
Alpaca Finance’s closure marks the end of a DeFi project that was once a key player on BNB Chain. The shutdown process is structured and will occur gradually through the remainder of the year, with clear instructions issued for asset withdrawal and position management.
The team has invited users to reach out with questions regarding the shutdown process and will continue to provide updates through official channels as necessary.
Read also: Mango Markets Shutdown: SEC Settlement Seals Its Fate
