Alpaca Finance

ALPACA is the native token of Alpaca Finance, a decentralized lending protocol on BNB Chain and Fantom. It also operates yield farms, which are smart contracts that let investors earn yields on tokens they stake within the platform.

ALPACA launched in late February 2021. It hit its all-time high of $8.78 on March 6. But because the token launched without a presale and could not be earned before its launch, it started with a small supply.

According to crypto-data provider Messari, the developers received 400,000 at launch and a community treasury took in 250,000 tokens, with an extra 142,857 allocated to staking rewards. Consequently, its market cap at the time of its all-time high was just $53 million.

ALPACA crashed almost immediately after, hitting $0.50 on April 1, 2021. When the token’s price briefly rose to $3.43 on May 4, 2021, its market capitalization was just $20 million.

Of the tokens’ total capped supply of 188 million, 87% (163.6 million) can be earned only by using the protocol – by lending and then staking tokens, or placing them in Alpaca’s yield farms. Messari predicts that all tokens will be in circulation by the start of 2024.

Another 8.7%, or 16.4 million ALPACA tokens, went to the project’s developers, subject to a two-year vesting period. The remaining 4.3% of the supply, 8 million tokens, will go to a “warchest” reserved for “future strategic expenses,” such as listing fees, audits and third-party services.

ALPACA’s market cap peaked at $233 million in August 2021. In the same month, the protocol’s total value locked (TVL) – a metric that describes the value of crypto locked in its smart contracts – peaked at $1.8 billion. By then, ALPACA’s price had fallen to about $1.

Although yield farming increases the number of ALPACA tokens in circulation, the protocol’s buyback-and burn-mechanism counters this to reduce the total supply, theoretically increasing ALPACA’s value.

To do this, the project uses a portion of its revenues to buy ALPACA from the open market, then sends the tokens to an uncontrolled wallet, permanently removing them from circulation.

As of June 2022, Alpaca Finance had burned 21.4 million ALPACA tokens, or 11.41% of its maximum supply.

Alpaca Finance is a lending protocol with a focus on yield farms and staking. Users can take out loans on Alpaca, then stake the crypto they’ve borrowed to increase their rewards. This mechanism also allows borrowers to take out undercollateralized loans, since the loans are backed by yield farming.

As of June 2022, Alpaca was the third-largest DeFi (decentralized finance) protocol on BNB Chain, after PancakeSwap and Venus. Alpaca lagged behind at quite a distance; while PancakeSwap had a TVL of $3.2 billion and Venus had a TVL of $741 million, Alpaca had a TVL of $507 million.

The community can use ALPACA to decide how the protocol distributes revenues it generates to stakers. As of June 2022, 90.78% of rewards go to stakers on BNB Chain, and 9.22% go to stakers on Fantom.

Alpaca’s head of business development is James Strudwick and its head of institutional sales is Rupert Douglas. As of an August 2021 interview with Binance, its head of institutional growth is Pete Woodard, and the head of engineering is the pseudonymous “SpicySquid168.” It does not list a founder, CEO or CTO.