Alpaca Finance said its leveraged yield farming saw strong early traction in 2021, but concentrated-liquidity AMMs with built-in leverage made traditional strategies less appealing and harder to execute profitably

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Alpaca Finance’s leveraged yield farming had an immediate product-market fit at launch in early 2021, as DeFi was blossoming on the BNB Chain.

However, the launch of concentrated liquidity AMMs fundamentally shifted the landscape. With inherent leverage already embedded in these new models, traditional leveraged yield farming became significantly less compelling and much more difficult to do profitably.