Shocking Alpaca Finance Shutdown: What Happened to the Token? 🦙💔

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In a world where fortunes are made and lost in the blink of an eye, Alpaca Finance, a decentralized finance (DeFi) lending protocol nestled within the realms of the BNB Chain and Fantom, has made the fateful announcement of its gradual demise, taking with it all the dreams and aspirations of its loyal users.

On the fateful day of May 26, the team, after what they described as “extensive internal deliberation and evaluation of future development directions” (a.k.a. a long coffee break), decided to pull the plug.

Alpaca Finance Announces Shutdown

Born without the crutches of pre-sale, venture capital funding, or pre-mine, Alpaca Finance once allowed users to open leveraged positions by borrowing from deposit vaults. Alas, the winds of fortune have not been kind, and the protocol has faced a series of unfortunate events, culminating in this rather dramatic closure announcement.

In a statement that could rival a Shakespearean tragedy, the team lamented their ongoing financial difficulties as the primary reason for the shutdown.

“In truth, the team has been operating at a loss for over two years, even after significant downsizing of the team. Continuing under these conditions is simply not sustainable,” the blog read, echoing the sentiments of many a beleaguered entrepreneur.

DefiLama data, that ever-watchful guardian of financial metrics, revealed that Alpaca Finance’s Total Value Locked (TVL) once soared to a staggering $900 million in early 2022. However, like a balloon losing air, it has faced a steady decline, now resting at a mere $54.6 million.

“With TVL and yields declining, revenue followed suit,” the team added, as if stating the obvious was a new revelation.

In their quest for survival, the team cited increased competition and market saturation as the key drivers behind their decision. Ironically, this announcement came just a month after Binance decided to delist the platform’s native token, ALPACA, as if to add insult to injury.

“The recent delisting of ALPACA from Binance was another major blow. It not only limits token accessibility but also restricts our ability to deploy our remaining warchest effectively toward any new initiatives,” Alpaca Finance shared, perhaps while shaking their fists at the sky.

Despite the delisting, the token’s value surged over 1,000% in the days following it, defying all logic and typical market behavior. ALPACA’s dramatic rally drew widespread attention and sparked concerns over market manipulation, because who doesn’t love a good conspiracy theory?

Nonetheless, the gains were as fleeting as a summer romance, and the latest news has pushed the price down further. BeInCrypto data showed that ALPACA’s price has depreciated by 32.1% over the past day. At the time of writing, the token’s trading price was a paltry $0.11.

In a bid to ensure a smooth and secure exit for users, Alpaca Finance has detailed a structured shutdown plan across all major product lines. The platform will cease accepting new positions on the original leveraged yield farming platform (AF1.0) in early June, and all remaining positions will be automatically closed by June 30, 2025.

The team has put Alperp, the perpetual trading product, into reduce-only mode, which sounds like a fancy way of saying, “We’re shutting it down completely by the end of June.”

Furthermore, they have halted all Automated Vaults immediately, converting any remaining funds into base tokens and returning them to users, because who doesn’t love a good refund? Borrowing in the AF2.0 Money Market will be disabled, and open positions will close automatically by July 30, 2025.

The protocol will also end its buyback and burn program, distributing revenue to Governance Vault stakers, because sharing is caring, right? Lastly, the platform’s interface will remain available for users to withdraw assets until December 31, 2025, giving everyone a little more time to say their goodbyes.

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2025-05-27 07:57