Alpaca Finance(ALPACA) Project Analysis-CoinW Institute

2 min readDec 1, 2022

Alpaca Finance(ALPACA)Project Analysis

1. Institute short review

alpaca finance was officially launched in 2021, with the main focus on leveraged mining, and once became the largest lending agreement on bsc. Initially, a long/short position was embedded in the leveraged mining, which was criticized by investors because of the relatively huge fluctuations, and its token value was way down. Then the project side launched a neutral mining strategy, hedged by opening long/short positions, which smoothed out the leverage volatility, while coupled with its own continued cross-chain expansion, brought in high revenue, making its fundamental value further tamped down. Recently, the project has announced its intention to launch a decentralized perpetual futures exchange, making its fundamentals continue to strengthen and worthy of attention.

2. Recent breaking points

Token unlocking is completed; decentralized derivatives exchange is launched.

3. Project introduction

Alpaca is one of the largest leveraged lending protocols on bsc, which is essentially a derivatives and currency marketplace for decentralized market makers. Market makers can leverage a larger market making principal through the Alpaca agreement to enhance their absolute return on market making; lenders can earn lending interest by lending funds.

4. Token role

Alpaca is the platform’s native functional token, which has several roles.

Collateralization: Users can pledge Alpaca tokens to earn interest returns.

Performance fee sharing: Multiple mechanisms help distribute the platform’s performance fees and make Alpaca a deflationary token. Performance fees from the revenue mining pool are allocated to Alpaca borrowers, and a portion of the loan interest is used for the Alpaca token repurchase and destruction mechanism.

Governance: Alpaca token holders will be able to create improvement proposals and vote on platform governance issues.

nft access: The platform is designed to integrate NFT and be available to Alpaca token holders and NFT holders. This may include exclusive real-world items, such as licensed merchandise from Alpaca Finance.

5. Token Allocation

Total volume: 180 million

Fair Issue Allocation: 87%

Development Fund: 8.7%

War chest fund: 4.3%

6.Project Outlook

The project, as one of the few largest defi protocols on bsc, has a stable and real protocol income. The current token is basically fully circulated, and the inflation rate is very much lower compared to similar products. And the project is now about to launch a decentralized derivatives exchange, considering the current surge in dex business, the same type of dex have a high valuation, Alpaca has sustainable development space, the overall project is worth looking forward to.