What Is Alpaca?
Alpaca Finance is a lending protocol that allows users to borrow funds for trading on Binance Smart Chain. Essentially, it offers borrowers the chance to make risky trades at high stakes with only minimal collateral and investors can earn stable yields in return without putting their own money on the line.
Alpaca is a decentralized financial infrastructure that leverages the power of blockchain technology, cryptocurrency and machine learning algorithms. As an enabler for the entire DeFi ecosystem, Alpaca amplifies liquidity within integrated exchanges by connecting LP borrowers with LPs in order to improve capital efficiency. It’s through this empowering function that Alpaca has become a fundamental building block within Decentralized Financial Infrastructure (DeFi), helping bring finance into every individual’s fingertip and giving each alpacas’ paws access to global markets like never before.
How do I use Alpaca Finance?
- Lender:
We offer a safe and stable way to earn money with your base assets by depositing them into our lending vaults. These deposits are then offered up for leverage in the yield farming market, so you can take advantage of higher returns without risking anything more than what’s already yours!
- Yield farmer:
You can borrow base assets from our lending vaults, allowing you to open a leveraged farming position, multiplying your farming APR by up to 6x (minus borrowing interest). Of course, these higher yields come with larger risks than lending: liquidation, impermanent loss, etc.
- Liquidator:
It is a tedious task that only now can be done with the help of bots. The ersatz farmers are programmed to monitor underwater farming positions and liquidates them when they reach too low an equity level, thus approaching risk of default.
Security of Alpaca
Alpaca Finance is the most secure platform on BSC. We never have security issues and we’ve got a multi-layered system that you can read about below:
- The BSC project has had a plethora of security audits by top firms such as PeckShield, Certik, Inspex and SlowMist. This is one reason why we are able to confidently say that the platform will be safe for you to use.
- Alpaca had a great month in the safety department, receiving two different awards. The first was from Defi Safety with its highest security rating on BSC and second place for Security Score by Certik. Alpacas were looking forward to making their customers feel secure this summer.
- Our team is interested in building the most sustainable and fair token possible. We are proud that 87% of our ALPACA tokens will go to platform participants, while only 9% goes to the company itself for continued development on this new technology. Nobody else had a chance at investing or buying any before launch – we made sure there was no pre-sale, presale, ico’s beforehand so it’s open as can be.
- We have a professional Bug Bounty Program with Immunefi that offers high rewards if anyone spots as little as a minor issue. We invite you to dive into our open-source code and see for yourself how we’ve combed through every line by hundreds of independent developers, making sure it’s perfect before release.
Capture Economic Benefits of Alpaca
The community will come together to decide how the economic incentives should be captured by ALPACA tokens, for example it could work like Sushiswap where x% of fees go towards performing token buyback and burn. At the moment though, there are already several mechanisms in place for both performance fee sharing and for making ALPACA deflationary in nature.
- 10% of the 19% performance fees for yield farming positions on the single-asset CAKE vault is distributed to ALPACA lending depositors as Protocol APR.
- We will be using 4% of the 5% that we receive as a fee for liquidation, to buyback and burn ALPACA tokens.
- 10% of the 19% interest that lenders earn during lending periods goes towards buybacks and burns of ALPACA tokens.
Deflationary Price Increase
Alpaca tokens are long-term deflationary. Emissions have a hardcap and are continuing to decrease, while burn is permanent and continually increasing, so it will be interesting to see how the token’s value changes as more of them get burned by Alpa Finance in the future. A significant portion of protocol fees go towards token burn: 80% of all liquidation fees earned from lenders’ collateralized loans go straight into burning coins – which means that every time there’s an interest rate cut or even if people start borrowing less money for short periods at high rates due to lower volatility risk (something most economists agree will happen eventually), we’re not just creating new coins with those lender funds but also destroying some amount too; this both reduces supply.
Conclusion
Alpaca Finance provides the next generation of finance by using blockchain technology to create a lending protocol that allows individuals and organizations to borrow assets for leveraged yield farming. Borrowed assets must be used on Alpaca’s platform, where users can earn rewards while engaging with other members in an easy-to-use environment. The native token is called ALPACA and offers many benefits including performance fee sharing, earnings from reward programs, network governance rights as well as exclusive access to non-fungible tokens (NFTs). Binance already listed Alpaca Finance (ALPACA) in the Innovation Zone and opened trading for ALPACA/BTC, ALPACA/BNB, ALPACA/BUSD, ALPACA/USDT trading pairs at 2021-08-11 08:00 AM (UTC).
