Alpaca Finance Shuts Down Business After Binance Delisting

Alpaca Finance, a BNB Chain-based decentralized finance (DeFi) protocol, has sunsetted its business. This move comes less than a month after leading cryptocurrency exchange Binance delisted the protocol’s native token, ALPACA. Following this development, ALPACA’s value tanked by over 50%.

After extensive internal deliberation and a thorough evaluation of possible paths forward, we have made the incredibly difficult decision to begin sunsetting Alpaca Finance and all of its products. This choice wasn’t made lightly, but we believe it is the most responsible course… pic.twitter.com/kwLXv87BsR

— Alpaca Finance 🦙δ0 (@AlpacaFinance) May 26, 2025

Alpaca Shuts Down Operations

Following its debut in early 2021, Alpaca Finance introduced undercollateralized lending services to the BNB Chain and Fantom ecosystems. It achieved this through leveraged yield farming. Being a four-year-old project, Alpaca witnessed two crypto market cycles, experiencing the thrill of bull runs and the hard lessons of downturns.

However, the project has now decided to shut down its operations. In an announcement published on Medium, Alpaca Finance listed three key reasons behind the latest action.

First, the DeFi protocol had no prior funding. Hence, it relied on protocol revenue to keep its operations active. Thus, reduced total value locked (TVL) and yield impacted the platform’s revenue, making it difficult for smooth business operations.

Second, Alpaca reckoned that the DeFi sector has significantly grown, implying a rise in competition. In response, the DeFi lender introduced products to stay on top of its game. These products included the AUSD stablecoin, the decentralized perpetual exchange (AIperp), and automated vaults (AVs). Still, the team explained:

“The broader market remained muted [as] suppressed yields and declining activities made these products increasingly unviable. [. . .] At this stage, we no longer see a viable opportunity within the team’s circle of competence that justifies further pursuit.”

Finally, the recent delisting of ALPACA from Binance marked a significant setback for the protocol. It limited token accessibility and impaired the protocol’s ability to deploy the remaining ALPACA stash to keep its business running smoothly. Surprisingly, though, interest in ALPACA remained high when Binance revealed plans to delist the token. This triggered a whopping 670% price pump at the time.

Effect on ALPACA

Shortly after the news that Alpaca Finance would wind down its business, its native token lost about 50% of its value. At the time of writing, however, its price currently trades at $0.125, representing a 23% price tank.

Meanwhile, Alpaca Finance shared details about deadlines and withdrawal processes for those whose funds are in the protocol. The announcement explained that it would disable opening new farm positions by the first week of June. The team strongly encouraged users to close all active positions before the end of June. This is because any active position as of June ending on AIperp will be automatically closed.

The team also urged borrowers to repay their loans and close their positions. Any active position will be automatically halted by end of July.

Although most services will end between June and July, users have until December 31st to access the DeFi lender’s front-end interface to finalize their withdrawal processes.

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