What Is ALPACA Finance and How to Get ALPACA on Swapzone?
For a while now, yield farming has been a popular way for projects to bootstrap their liquidity and gain new users. However, lately, the cost of the process has been on a steady rise to a point that it’s becoming increasingly prohibitive for a majority of individuals. In fact, thanks to the Ethereum gas prices being extremely high, the whole process has become a whale game. As a result, a lot of people have started shifting their focus to a more affordable solution, the Binance Smart Chain (BSC).
BSC is the second-largest blockchain platform after Ethereum in terms of TVL (Total Value Locked). At the moment, in the BSC ecosystem, Alpaca Finance has a TVL of $1.7 billion USD. It lies only behind Venus and PancakeSwap. Wondering what Alpaca Finance is and how it works? This article attempts to answer all these questions. Stick around to the end of the article to learn how you can exchange your current token holdings to ALPACA. Let’s dive in!
What is Alpaca Finance?
Alpaca Finance is the biggest lending protocol on BSC (Binance Smart Chain) that features farming with leverage. The platform offers borrowers undercollateralized loans for leveraged farming positions while helping lenders earn safe and stable returns. Therefore, it is seen as an important project within the DeFi community. Alpaca itself is a fair launch project, which means that it had no pre-sale, no pre-mine, and no investor. Thus, right from the start, it was always a product that was built by the people for the people.
How does Alpaca Finance work?
The way Alpaca Finance works is pretty simple. There are two ways in which you can participate in the platform. Each way provides you with some benefits. They include:
You can participate in the platform as a lender where you can deposit your tokens into lending vaults where you can earn safe and stable returns. Once you deposit them into the vault, farmers can borrow them to leverage the positions.
- Yield Farmers
As a yield farmer, you have the option to borrow tokens from the lending vaults and use them to open a leveraged position. Thus, multiplying your APR by up to 6 times. This mode comes with potential risks such as impermanent loss or liquidation.
There’s another participant in the system – the liquidator. These ones are responsible for monitoring leveraged farming positions and liquidating them in case their prices drop and approach the risk of default. All liquidators are bots.
Farming with Leverage
Farming is a process where users loan or stake out their digital assets to others by providing them liquidity in return for receiving returns. Farming with leverage is the process of using borrowed capital to increase your digital asset base and with it the potential to earn higher returns on the base. In short, you borrow funds to invest more and thus, earn more. It is basically a profit maximization strategy that isn’t as complicated as it may seem.
Graze is an awesome concept for those who wish to invest their Alpaca into other projects. You just need to choose an ideal pool and stake ibALPACA tokens to exchange them for other tokens from other projects. The pools vary from time to time and have a timer to show how much time is remaining to stake ibALPACA to acquire tokens of the platform. You will also be able to choose which token reward you want to graze on. If you stake ibALPACA in a pool from the beginning to the end, there is a chance that you might receive a special reward, such as an Alpaca NFT.
ALPACA Token Utility
The ALPACA token is the platform’s native and central token responsible for governing and also capturing the platform’s value. Some of the benefits of the Alpaca token include:
- Decentralized Governance
Alpaca is working on launching a governance vault that will allow any users to stake their ALPACA tokens in order to acquire voting rights. 1 ALPACA will equal 1 vote. Anyone who stakes their token holdings will be able to vote and decide on key Alpaca governance decisions.
- NFT Access
There are plans to integrate Non-Fungible Tokens (NFTs) with utility into Alpaca. To gain access to these NFTs and enjoy other benefits such as exclusive Alpaca merch, users will have to hold ALPACA tokens first.
- Economic Benefits
There are several mechanisms put in place to ensure that economic incentives are captured on Alpaca. Some of these mechanisms include: a tenth of the 19% performance charge is distributed as “Protocol APR” to ALPACA platform depositors. 4% of the 5% of every liquidation bounty goes towards buybacks and ALPACA token burns. 10% of the 19% of the lending interest that lenders earn will go towards buybacks and ALPACA token burns.
- Deflationary Price Increase
ALPACA tokens are long-term deflationary. This means that as the platform continues to grow, more ALPACA tokens get burned. As more tokens get burned, the value of each token will continue rising steadily and permanently.
How to exchange ALPACA on Swapzone?
Wondering where to buy ALPACA? Don’t worry, Swapzone is the best Alpaca coin exchange platform in the crypto market today. To conduct an Alpaca exchange on Swapzone:
Step 1. Open Swapzone on your web browser.
Step 2. Locate the “select pair” tab, and insert the amount of BNB that you are willing to swap in the “send” section.
Step 3. In the “get up to” section, you will see the amount of ALPACA to receive for your BNB.
Step 4. Immediately after you enter the details, Swapzone will provide you with a number of offers. You have the option to choose based on the best rate, fastest exchange time, and the one with the best service rating.
Step 5. Worried about the validity of a particular exchange? Fret not, Swapzone has taken an extra step to ensure that information about each exchange partner has been added to the platform. This information includes reviews, pros, and cons. To access this information, simply click on the exchange and you will automatically see it.
Step 6. Once you find an offer you like, simply click on it and click on “exchange”.
Step 7. Once you do so, you will be prompted to enter the wallet address to receive your ALPACA, an address to refund you, and an email address (which is optional).
Step 8. Once you’ve entered these details, hit on “proceed to exchange”.
Step 9. After your deposit is received, the exchange partner will then convert your BNB deposit to ALPACA. Just wait for the process to finalize. It may take some time.