Alpaca Finance, a DeFi protocol known for pioneering leveraged yield farming on BNB Chain, has announced it will shut down operations by the end of 2025. The team cited falling revenue, failed merger discussions, and Binance’s recent delisting of its native token as key reasons for the decision.
From Peak to Shutdown
Launched during the 2021 DeFi boom, Alpaca Finance quickly gained popularity for allowing users to amplify farming returns through borrowing. At its height, the protocol managed over $1 billion in total value locked (TVL) and was among the top players on BNB Chain. However, despite its early success, the project has been running at a financial loss for over two years.
Unlike many other DeFi platforms, Alpaca had no venture capital backing or pre-mined tokens. Its fair launch model limited funding options, making it harder to survive in today’s more competitive and capital-heavy DeFi market.
The Impact of Delisting
In April 2025, Binance delisted ALPACA, the protocol’s token. The move briefly triggered a 550% price spike due to a wave of short liquidations totaling over $55 million. However, the delisting also cut off major access to the token, reducing liquidity and making it difficult for the team to pursue new strategies or secure partnerships.
M&A Talks Fell Apart
Alpaca’s team revealed they were in merger and acquisition discussions with several other projects, some of which had advanced negotiations. But when market conditions worsened in early 2025, those deals collapsed, leaving the project with no viable path forward.
Shutdown Timeline and User Withdrawal
All Alpaca products, including its original farming platform, automated vaults, and perpetuals, will begin winding down in the coming months. Users will retain front-end access until December 31, 2025, to give them time to withdraw funds.
“This choice wasn’t made lightly,” the team stated. “But we believe it is the most responsible course of action to safeguard our community and ensure a graceful and secure wind-down.”