Is Alpaca Leveraged Yield Farming Safe?
Risk Grade: C- (57/100)
Alpaca Leveraged Yield Farming is rated as elevated risk — multiple novel mechanisms and notable interaction risks.
Elevated risk — winding-down protocol with historical oracle failures and inherent leverage-amplified liquidation risk.
Alpaca Finance is a leveraged yield farming protocol on BNB Chain that lets users amplify DEX LP positions up to 7x by borrowing from lending pools. With $31M TVL remaining, the protocol announced a wind-down by end of 2025 after experiencing declining usage from its $900M peak. A C- risk grade reflects a significant oracle failure that caused $2.8M in losses and the inherent danger of leveraged positions during volatile markets.
TVL
$31M
Mechanisms
7
Interactions
5
Value Grade
F
Key Risks for Alpaca Leveraged Yield Farming Users
The protocol has announced plans to shut down, meaning active development, monitoring, and support may cease — increasing the risk of unresolved issues for remaining users.
Leveraged farming amplifies both gains and losses; a sudden market drop can liquidate positions faster than users can react, potentially losing their entire deposit.
A past oracle failure allowed attackers to drain $2.8M from lenders when prices were not updated quickly enough, and similar vulnerabilities could still exist for other supported tokens.
Top Risk Factors
- •Protocol announced wind-down by end of 2025 with declining operations, raising significant counterparty and continuity risk for remaining users.
- •Historical oracle failure allowed $2.8M in losses when THENA price volatility was not reflected, exposing systemic oracle surface risk in leveraged positions.
- •Leveraged yield farming amplifies liquidation cascade risk during correlated market downturns, compounding losses beyond initial collateral.
Risk Score Breakdown
Alpaca Leveraged Yield Farming's highest risk area is Track Record (15/15). Here's how each dimension contributes to the overall 57/100 score:
Read the Full Alpaca Leveraged Yield Farming 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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