Lesson

How to Lend/Borrow Crypto, Mint Stablecoins, and Earn Passive Income?

Alpaca Finance is a DeFi lending & savings platform that helps lenders earn safe & stable yields, and offers borrowers undercollateralized loans for yield farming. With industry-leading security standards & a spotless safety record, Alpaca is the largest leveraged lending platform on BNB Chain & Fantom, allowing users to lend/borrow crypto, mint stablecoins, & invest in high yield, low risk, market-neutral Automated Vaults.

What is Alpaca Finance?

TL:DR:

Blue-chip DeFi lending & savings platform on BNB Chain & Fantom
Products: (1)Lend crypto, (2)borrow crypto for yield farming, (3)mint stablecoins, & (4)invest in Automated Vaults for high yield, low-risk passive income

Alpaca Finance is a DeFi lending and savings platform that helps lenders earn safe and stable yields, and offers borrowers undercollateralized loans for yield farming, vastly multiplying their base capital and resulting profits.‌

With industry-leading security standards and a spotless track record of safety, Alpaca has earned the trust of countless users, who have almost $1 billion USD deposited in Alpaca, helping it cement its place as the largest leveraged lending platform on BNB Chain & Fantom. Alpaca allows users to lend or borrow crypto, mint stablecoins, and invest in Automated Vaults that offer high yields at low-risk due to their automated market-neutral strategies.

As a DeFi platform, Alpaca allows you to earn higher yields on your capital than traditional financial institutions such as banks. At the same time, you always keep custody of your assets, knowing where they’re earning yields for you, with the freedom to move 24/7.

How do Alpaca’s DeFi products work?

Lenders deposit crypto assets to earn yields, not having to worry about things like impermanent loss.

Those assets are then loaned out to borrowers, who pay lenders borrowing interest so that the borrowers can use the funds in leveraged yield farming positions.

For example, if you want to farm and you have $20,000, you can borrow up to 5x that much from Alpaca and farm with $120,000 instead, earning 6x the yields of other platforms. In short, Alpaca allows you to maximize your profits.

One other thing Alpaca allows you to do is mint the stablecoin AUSD. By opening a position on the AUSD page, you can deposit an asset as collateral, which Alpaca automatically deploys into lending to earn you yields, while also loaning you AUSD.
‍

With AUSD, you can stake it to earn up to an additional 12% APY, or sell it for another token. This offers holders of crypto assets like BNB more flexibility; If they don’t want to sell BNB, they can just mint AUSD as a loan against their BNB instead, and use the AUSD however they want.

If you want to minimize your risk while still earning high yields, Alpaca also has a novel product called the Automated Vault, which opens and automatically manages market-neutral leveraged farming positions for you, providing you with high-yield, low-risk, passive income. These strategies are profitable in all market conditions, bull or bear, and come with thoroughly backtested data verifying their historical profitability. So there is no need to guess about the market here, just invest and earn profits passively.

‍

What are the primary problems that Alpaca solves?

TL;DR

Poor capital efficiency
Bad UX
Bear market unsustainability

Alpaca solves three major problems common to most DeFi projects: capital inefficiency, poor UX/usability, and market sensitivity.

Firstly, one of Alpaca’s unique value-adds over other DeFi platforms is Alpaca’s superior capital efficiency. Alpaca adds leverage to yield farming, which means not only will users earn yields on their crypto assets, but with leverage, they can earn multiples of what they would otherwise. For lenders, this also results in higher funds utilization which creates higher APYs.

Few DeFi platforms offer such capital efficiency through undercollateralization, and Alpaca has even gone out of its way to make using their DeFi products as simple as possible, with a clean and intuitive UI, thorough videos and docs in multiple languages, and around the clock multi-language support.

Finally, another highlight of Alpaca’s model is that it’s market-resistant. Unlike most other DeFi platforms, you can make money with Alpaca not only when the market is going up, but also when it’s moving sideways, or even down. That’s because Alpaca allows you to open high-yield short positions, or invest in market-neutral strategies in their Automated Vaults, which hedge out market exposure, providing high APYs at low risk, similar to lending stablecoins.
‍

How does Alpaca stand out from other Defi projects?

TL;DR:

High APYs
No deposit fees, no withdrawal fees, No lockup
Industry-leading security

Due to its superior capital efficiency, Alpaca’s APYs are sustainable and some of the highest available for lenders or borrowers.

Unlike other platforms, Alpaca also has no deposit fees, no withdrawal fees, and no lockup, which means you can deposit and withdraw freely to Alpaca at any time.

Lastly, Alpaca is well regarded as one of the safest DeFi platforms. Alpaca has received over 20 security audits, has an Insurance Plan, is open source, has received top security scores from opsec institutions, has a 24-hour timelock, doesn’t allow flash loans, and has a spotless track record of safety.

Furthermore, Alpaca is one of the leaders across DeFi comparisons; high TVL locked, over 60,000 user wallets, and is listed on Binance. All this makes Alpaca one of the few DeFi platforms where you can deposit assets and leave them there comfortably, knowing they’ll be safe and earning you sustainably high yields.

How do I get started with earning yields in Alpaca?

Like all DeFi platforms, to use Alpaca, you need a Web3 wallet and gas. If you don’t know what that means, Alpaca has step-by-step guides, video tutorials, and strategy articles to get you started with DeFi. You can also ask for help any time in Alpaca’s communities, where many moderators and fellow members are active and helpful. Welcome to the Herd!