In the Project Spotlight series, we interview interesting projects developing on the Binance Smart Chain (BSC). Previously, we shared interviews with many projects, including Kalata Protocol, Tranchess, Argon, My DeFi Pet, and ApeSwap. The next project we interviewed is Alpaca Finance, one of the winning projects from #MVBII. Alpaca is the first lending platform on BSC with support for leveraged yield farming.
Spotlight on Alpaca Finance
IMPORTANT: Please note the following content does not constitute an endorsement or approval of any of the products or services of the project, organization, or individual.
So what is Alpaca Finance about? Can you explain your platform to those unfamiliar with it?
Alpaca Finance is a top 25 DeFi project. It's the 1st lending platform on Binance Smart Chain to support leveraged yield farming. Where Alpaca is unique compared to other major DeFi lending platforms like Compound, Venus, or Aave is Alpaca offers undercollateralized loans to any user, and it’s the largest lending protocol to do so with over $1 billion TVL.
Alpaca can offer undercollateralized loans safely because those borrowed assets have to be used within its platform for leveraged yield farming, on DEXs like PancakeSwap. It’s also interesting to note that because Alpaca offers undercollateralized loans, it has better capital efficiency than other lending platforms, allowing us to offer higher APYs to lenders as well.
At the user level, you could say Alpaca’s a powerful profit-enhancing tool for market makers who want to provide liquidity on exchanges. So if a user wants to LP on PancakeSwap, Alpaca can loan them assets to ramp up their positions and their resulting APYs up to 6x.
Finally, at the DeFi ecosystem level, Alpaca also plays a significant role, because it amplifies the liquidity layer within DEXes and the blockchains they run on, multiplying their TVLs as lending assets get deployed as DEX liquidity, which improves trade execution, making the entire ecosystem function better.
Our mission at Alpaca is to use our platform's unique liquidity amplification ability as one of the key driving forces to spread decentralized finance to the masses, and to grow Alpaca into a top 5 DeFi protocol.
What are the main advantages of Alpaca compared to competitors?
Not only does Alpaca offer some of the highest sustainable APYs in yield farming for borrowers or lenders due to our model of capital-efficient undercollateralized loans, but most notably--Alpaca is THE safe place to earn yields where you won’t have to worry about exploits, hacks, or rug pulls. Alpaca has never had a security issue, has never had a scandal, and is widely known as one of the safest and most transparent projects on BSC.
What led to the creation of Alpaca? When was the idea born?
When BSC ushered in a user explosion in February due to gas costs becoming too high on Ethereum, we recognized BSC was a new ecosystem with a large user base and budding opportunities. We'd been exploring the concept of leverage for yield farming for a while and believed we had a unique perspective on it. Yet, the opportunity was short-lived because many other teams were also starting to build on BSC, so we had to be fast, and we were.
We built the prototype platform for Alpaca in less than a week and launched and have been one of the fastest building and fastest growing platforms on BSC ever since.
Can you introduce us to the brains behind Alpaca? Tell us something about your team.
Alpaca’s team is highly technical and full of people with deep backgrounds in various sectors of blockchain and finance. We have a full-time development team of several dozen engineers, as well as dozens more between design, business development, R&D, and marketing. Every member of our main leadership team has years or even decades of experience in fields such as blockchain, FinTech, consumer tech, banking infrastructure, and traditional finance.
James Strudwick: Head of Business Development
Formerly Director of BD in TQ Tezos
4 years working in blockchain
A decade working in CeFi institutions such as BNP Paribas and Avalon Capital Markets
Pete Woodard: Head of Institutional Growth
Former CBDO at crypto lending platform Nebeus
4 years working in blockchain
4 years working in banking infrastructure
SpicySquid168: Head of Engineering
Manages several dozen full-time Alpaca engineers
Huacaya Chief: Head of Product
Responsible for Product planning and design including content and artwork
4 years working in blockchain; co-founded a blockchain startup
2+ years as head of product in a FinTech start-up
Samsara: Head of Marketing, Strategy
4 years working in blockchain
Serial entrepreneur; 5+ years of experience leading consumer-tech startups
Rupert Douglas: Head of Institutional Sales
25 years working in finance
Raised close to $2Bn for 4 different hedge funds
Working in digital assets since 2019
How do you protect your users? Is security your priority one?
Within the BSC community, Alpaca Finance is widely regarded as one of the most secure platforms because of our spotless track record of never having had a security issue, and our multi-layered security processes, which you can read below:
- We’ve had 9 security audits which is one of the highest amounts for any project on BSC, from top firms such as PeckShield, Certik, Inspex, and SlowMist.
- Just last month in June 2021, Alpaca received the highest security rating on BSC from Defi Safety, and the 3rd highest Security Score from Certik.
- Our code is open-source and we have a professional Bug Bounty Program with Immunefi.
- Then, besides extensive code reviews having been conducted both internally and externally, there are also built-in safeguards in place. For example, all the contracts we deploy are owned by a Timelock contract. Thus, any changes made by our developers will have a 24-hour lag before becoming effective. That means users will have ample time to withdraw their funds and exit safely in the case of any questionable update to the code. With tens of thousands of users, you can believe that every small change is under constant scrutiny from many participants. At times, it's a tough job dealing with all their questions, but it's honest work.
- Regarding flash loans, Alpaca does not allow them so you will be safe from all such attacks.
- Then for price manipulation and flash liquidation, Alpaca integrates Chainlink price feeds and also has an in-house Oracle Guard which prevents those.
- Finally, we make efforts not only to secure our own protocol, but also the entire ecosystem. That's why we only work with projects that meet our high standards for safety. Every project we work with has to pass our Security Scorecard, a type of qualitative audit that complements code audits.
Why did you decide to build on BSC?
BSC has the second largest active user-base for DeFi. More importantly, compared to Ethereum, it’s much faster and cheaper to participate and build on BSC.
Can you share some details about your roadmap? Anything we should be looking forward to?
We’re constantly coming out with new features and products. Our detailed roadmap is here. At the moment, we’re speaking with many of the top institutions in the digital assets space about creating institutional investment products on Alpaca to allow for large amounts of capital inflow into BSC from traditional finance institutions.
Where should I start if I want to get on Alpaca Finance?
Alpaca has the most detailed documentation library of any protocol on BSC, available in 8 languages. There are: