Alpaca Finance to shut down; ALPACA token drops 30% in 24 hours

Alpaca Finance has officially announced it will begin sunsetting all of its products after four years of operation. The protocol gained popularity in early 2021 for its leveraged yield farming on BNB Chain, but has since lost relevance due to the rise of concentrated liquidity AMMs and prolonged market weakness.

The team introduced new products such as Automated Vaults, the AUSD stablecoin, and the Alperp perpetual DEX, but none gained sufficient traction. Merger talks with other projects also fell through amid the downturn in early 2025.

With no VC funding and revenues tied directly to protocol activity, Alpaca has been operating at a loss for over two years. The recent delisting of ALPACA from Binance further impacted the project's outlook. The token price has plunged 30% in the past 24 hours.

The shutdown will proceed in phases: new positions will be disabled starting in June, remaining positions will be auto-closed in June and July, and the front-end will remain online until the end of 2025 to allow users to withdraw their funds.