Alpaca Finance is the largest lending protocol that offers users leveraged yield farming on the BNB Chain and Fantom network.
Alpaca is a lending protocol that allows for leveraged yield farming by assuming additional risk within the platform. At its core, Alpaca is a two-sided money market platform with lenders and borrowers. Lenders earn interest by depositing assets into specific vaults. These assets are then offered to leveraged yield farmers as undercollateralized loans that can only be used within the Alpaca platform. Lenders receive a proportional balance of pool-specific interest-bearing tokens (ibTokens) to track their deposited funds and accrued interest. These ibTokens can further be used by lenders to generate additional yield by minting AUSD, which is forked from MakerDAO. Yield farmers use the undercollateralized loans provided by Alpaca to multiply their returns.
Alpaca generates protocol revenue from a variety of sources including yield farming performance fees, liquidation fees, lending interest, non-fungible token (NFT) royalties, AUSD stability fees, and vault management and withdrawal fees. In most cases, Alpaca has elected to use the protocol revenue to buyback and burn the native ALPACA token to enhance its value.
You can earn yield by depositing assets to earn borrowing interest, maximize your LP positions through leverage, and earn passive income with AUSD from inflationary protocol emissions. ALPACA holders can also stake in the governance vault in exchange for xALPACA to receive platform revenue sharing. The deflationary nature of ALPACA also means the token price should increase over time simply from holding as more ALPACA is burnt from the market.