Leveraged Yield Farming Mechanics


Alpaca Finance deploys automated strategies that work to achieve the highest possible yields for our farmers. We also want to make sure our users have the best experience when interacting with our platform. That’s why we’ve simplified the leveraged farming process by automating many things behind the scenes.
Some of our key features for enhancing usability are:
  • 💰Flexible deposit options: our vault optimally converts your deposited assets and the borrowed BNB or BUSD to get an equal value-split to supply the farming liquidity pool. So for example, for the CAKE/BNB pool, you can deposit any amount of CAKE and/or BNB to start farming without having to do the conversions yourself.
  • 🍰Automatic staking: our code stakes the LP tokens for you on the chosen platform(PancakeSwap, etc. ) automatically, so you can start earning rewards right away.
  • 📈Continuous auto-compounding: As part of the transaction when any user interacts with the pool (when you or any user opens/closes/adjusts a position for your given pool), the DEX rewards (CAKE, etc.) gets converted into the LP tokens for the pool you are farming, and compounds them onto your farming principal so you can maximize your APY. We also have a bot that executes the reinvestment on a periodic basis (i.e., daily) in case no one interacts with the pool to ensure your rewards still get compounded regularly.
For the specific automated strategies of each farming pool, please refer to the following pages: