Catenaa, Thursday, May 29, 2025-Alpaca Finance, a once-prominent decentralized finance protocol on BNB Chain, announced Monday it will shut down operations after four years, citing prolonged financial pressure and the recent delisting of its token from Binance as key factors in its decision.
The announcement triggered a steep selloff of its native ALPACA token, which plunged 30% to \$0.112 following the news.
The protocol, launched in early 2021, was a pioneer in leveraged yield farming and quickly rose to prominence on the BNB Chain. However, Alpaca’s core model struggled to maintain relevance as decentralized finance evolved with more complex products such as concentrated liquidity AMMs, leading to declining user demand.
Despite efforts to diversify through the launch of Automated Vaults, the AUSD stablecoin and a decentralized perpetual exchange called Alperp, the team revealed it had been operating at a loss for over two years. Attempts to secure mergers or acquisitions ultimately failed amid deteriorating market conditions.
The final blow came with Binance’s decision to delist ALPACA, a move that the team said “restricted our ability to deploy our remaining warchest effectively.”
Alpaca Finance will begin winding down services, with major products, including leveraged yield farming and Alperp, scheduled for deactivation by late June or July. The protocol’s interface will remain online until year-end to allow user withdrawals.
Buybacks and token burns will be discontinued. Governance participants will receive remaining revenues during the closure process.
The shutdown underscores the financial fragility of fair-launch DeFi projects in a competitive market without venture capital backing.
