Is Alpaca Finance Safe?
Risk Grade: C- (53/100)
Alpaca Finance is rated as elevated risk — multiple novel mechanisms and notable interaction risks.
Protocol shutdown complete — Alpaca Finance ceased all operations December 31, 2025 following Binance ALPACA delisting. No active user exposure.
Alpaca Finance was a leveraged yield farming platform on BNB Chain that allowed up to 6x leverage. It completed a full shutdown by December 31, 2025 after Binance delisted the ALPACA token in April 2025. All positions were auto-closed by June 30, 2025. The protocol is no longer operational.
TVL
$83,000
Mechanisms
7
Interactions
5
Value Grade
D
Key Risks for Alpaca Finance Users
The platform announced shutdown after Binance delisted the token. Remaining deposits face heightened risk from reduced team support and infrastructure maintenance.
Farming with up to 6x leverage means a 17% price drop can wipe out your entire position. During market crashes, many positions liquidate simultaneously.
If the liquidation bots stop working after the team winds down, underwater positions create bad debt that is socialized across lenders.
Top Risk Factors
- •Alpaca Finance completed full shutdown by December 31, 2025 following Binance ALPACA delisting in April 2025. All leveraged positions were auto-closed by June 30, 2025; front-end access ended December 31, 2025. The protocol is no longer operational — any remaining on-chain interactions occur on unmaintained contracts with no team support.
- •Leveraged yield farming up to 6x amplifies liquidation cascade risk during market downturns on BNB Chain — historical exposure, no longer active but reflects mechanism risk if contracts were still in use.
- •Under-collateralized lending model for leveraged positions creates systemic bad debt risk if liquidation bots fail during volatile markets.
How Alpaca Finance Compares to Peers
Alpaca Finance ranks #112 of 116 Yield protocols (bottom quartile — among the riskiest). At a risk score of 53/100, it's 17 points riskier than the sector average of 36/100.
Adjacent peers: K3 Capital (C-, 51/100) is ranked just safer, and AILayer Farm (C-, 54/100) is ranked just riskier.
See the full Yield sector leaderboard or the Alpaca Finance vs AILayer Farm comparison.
Common Questions about Alpaca Finance
Plain-English answers based on Alpaca Finance's scores across Hindenrank's 8 risk dimensions. The highest-scoring (riskiest) dimension is Track Record (15/15).
Has Alpaca Finance ever been hacked or exploited?
Alpaca Finance has a documented incident history that materially raised its risk grade — the track record dimension scored 15/15, near the high end of the scale. Past exploits, governance failures, or contract issues are baked into this rating. Anyone considering deposits should review the incident details before allocating capital.
How much money is at stake in Alpaca Finance?
Alpaca Finance currently holds a small TVL — exit liquidity is a real concern at this size. Smaller TVL means individual depositors carry a larger share of any loss event, and it can be harder to exit a position quickly during stress.
What's the worst-case scenario for Alpaca Finance?
Hindenrank has identified specific collapse scenarios for Alpaca Finance. The most prominent: "Post-Shutdown Smart Contract Failure". The trigger condition is Team reduces infrastructure maintenance post-shutdown, leaving remaining $12M in deposits exposed to unmonitored smart contract risks. Reading through the full scenario list on the protocol page is the single best way to understand the actual failure modes — generic "smart contract risk" is rarely the thing that takes a protocol down.
Is Alpaca Finance regulated or insured?
Alpaca Finance has some regulatory exposure (4/10), typical of mid-sized DeFi protocols. There is no specific enforcement action on record, but the structure includes elements that regulators have flagged in similar protocols. No DeFi protocol carries FDIC-style insurance — even with low regulatory risk, depositors are not protected in the way bank customers are.
What are the biggest red flags for Alpaca Finance?
Hindenrank's retail-focused risk audit flagged: The platform announced shutdown after Binance delisted the token. Remaining deposits face heightened risk from reduced team support and infrastructure maintenance. Farming with up to 6x leverage means a 17% price drop can wipe out your entire position. During market crashes, many positions liquidate simultaneously. If the liquidation bots stop working after the team winds down, underwater positions create bad debt that is socialized across lenders. On the technical side, 1 critical-severity interaction risk has been identified.
Should beginners deposit into Alpaca Finance?
Alpaca Finance's C- grade puts it in the elevated-risk band. This is not a beginner-friendly protocol. Anyone depositing here should treat the position as speculative and avoid concentrating significant savings in it.
How does Alpaca Finance compare to safer Yield alternatives?
Alpaca Finance is one protocol in Hindenrank's Yield coverage. The safest Yield protocols on the leaderboard tend to share three traits: a long incident-free track record, conservative mechanism design, and high-quality public documentation. Compare Alpaca Finance against the full Yield ranking before committing capital.
For the full 8-dimension score breakdown, the radar chart, and dependency graph, see the Alpaca Finance risk report.
Read the Full Alpaca Finance Risk Report
This protocol has 2 collapse scenarios. 1 critical and 2 high-severity interaction risks identified. See the full mechanism classification, interaction matrix, and deep-dive recommendations.
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