Snapshot:
- What is Alpaca Finance?
- What is the main problem that Alpaca solves?
- What is Alpaca academy?
- Pioneering role of Alpaca in the NFT space.
What is Alpaca Finance?
Alpaca Finance is the largest lending protocol that allows leveraged yield farming on the Binance Smart chain. Lenders can earn stable yet safe yields through Alpaca while borrowers can borrow undercollateralized loans for their leverage yield farming positions. This vastly multiplies their resulting profits.
The liquidity layer of the integrated exchanges is amplified by Alpaca to improve capital efficiency by connecting lenders and LP borrowers. This amazing functionality has made Alpaca a fundamental building block within the DeFi space. This brings power to the users.
Wondering what’s yield farming and leveraged yield farming? Yield farming is a method to earn interest on the cryptos similar to how one earns interest on their money on a savings account. Just like a user deposits their savings in the bank account and earns interest similarly the cryptos must be locked up or staked for a period of time to earn interest and other rewards such as more cryptocurrency.
However, leverage yield farming is a little different and more lucrative. It is yield farming combined with the ability to borrow the assets and reinvest them automatically. The users can reinvest the framed tokens along with the trading fees to increase their returns over the period of time.
Additional Read: Beginner’s Guide to Yield Farming
What is the biggest problem that Alpaca Finance solves?
The main problem that Alpaca resolves is capital inefficiency in the lending protocols. If a user visits the competitors’ Alpaca has such as Compound, Aave, venus, or Celsius, they might feel that these APYs look way better when compared to a traditional bank. However, the users are unaware of the even higher APYs at Alpaca. It offers nearly 20% APY for safe lending of BUSD, USDT, or BNB along with nearly 10% for lending ETH and BTCB. Alpaca offers popular LP pairs providing APYs in hundreds even for pairs like USDT-BUSD providing 100-50% APYs.
Other platforms have lower APYs than Alpaca because of two reasons: higher fees and low utilization rates of the funds. Alpaca charges only 10% of lending profits and 3% from borrowers.
Although it allows undercollateralized loans but maintains safety for the lenders by not allowing those funds to be withdrawn from the platform, it offers way better capital efficiency than other lending platforms.
Additional Read: CoinDCX Contest: Predict & Win Alpaca NFT
What is the Grazing Range Program?
Grazing range is the virtual place where all the Alpacas can graze on the rare crops to receive rewards of their choice. Each of the Alpacas gets to select the token rewards they wish to graze on and stake ibALPACA to receive those rewards.
What are the security protocols incorporated in Alpaca finance to protect the investors?
Alpaca’s code is open source and every line of code has been vetted by hundreds of independent developers. Alpaca even conducts a Bug bounty program and gives great rewards to developers who are able to find bugs even minor issues in their network.
Alpaca even asks top security firms to provide regular audits of their code. The smart contracts that Alpaca has been audited by PeckShield. Every now and then the network schedules audit from big firms like Certik and SlowMist to ensure the security of the protocol. Apart from all this, there are built-in safeguards in place. All the contracts deployed by the, are Timeclock contracts. Therefore, any changes that our developers conduct will have a 24 -hour lag before it becomes effective. This gives ample time to the users to withdraw their funds and therefore exit safely in case of any questionable update to the code. Every small change in the code is under constant scrutiny from the participants. Security comes as the first priority for the Alpaca team.
What is Alpaca academy and how is it helping the community?
Crypto space in itself lacks a lot of knowledge and understanding. Alpaca focuses on educating its users about the DeFi space and the powerful tools it provides to its users. A dedicated set of content is published on the Alpaca academy for everyone and anyone who wishes to learn about the DeFi space, yield farming, Alpaca finance, etc.
The users will just not find basic content over the DeFi space but will also get in-depth research-based articles on leveraged yield farming and how one can earn profits using it.
What is Alpaca’s plan for the NFT market?
Alpaca Finance has done a brilliant job of giving utility to its NFTs. Users who go through the Alpaca academy and achieve a certain set of scores can earn Alpaca NFTs. These NFTs can then be used on the NFT marketplace. Although its primary business is DeFi, Alpaca is also a pioneer in the NFT space. In early 2021, Alpaca released the first NFT animated short story series which was set up to its lore in Metaverse. This was before stoner cats or other contemporaries came into play. Alpaca finance has released 50 NFT campaigns so far.
The focus of Alpaca is to create NFTs with Utilities such as POAPs, certificate NFTs, etc. Alpaca has also started to incorporate NFTs in the play-to-earn gaming and DeFi sector. The newly launched Alpies NFT collection is a series of 10,000 exclusive NFTs that was built to offer utility within the massive ecosystem. They shall also serve as pre-sale allocation tickets as well as heroes in the new pay-to-earn game of Alpaca.
Related posts
Top Queries Around ITR Filing for Crypto Gains 2023-24
Crypto tax season now simplified for your ITR filling!
CoinDCX has ZERO Exposure to the FTX Collapse Fiasco | Live AMA with Sumit Gupta, CEO – CoinDCX
In all of the incidents that the crypto space saw in 2022 including the FTX Collapse, CoinDCX had zero exposure.” The customer funds are left as it is coupled with the $100 million insurance from BitGo.