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Crypto Day Trader Gives Several Reasons to Watch Alpaca Finance

strategies in the platform's updated roadmap could position the ALPACA token for growth.

Absolute Alpaca Confidence

A Crypto Day Trader has made a case for crypto investors to take a closer look at the prospects of Alpaca Finance. The trader, known on Twitter as  0x8day0trader, thinks that Alpaca Finance's ecosystem token, the $ALPACA, is nowhere near what its value should be.

0x8day0trader believes that the cumulative effect of several positive features of the Alpaca Finance ecosystem would ultimately drive the price of the $ALPACA token upwards.

"@AlpacaFinance is extremely undervalued . . .  Some recent updates give me confidence that $Alpaca will pump.", the trader tweeted on December 27.


Hey Trader! What's Your Basis?

Experience in the world of crypto shows that the value of crypto is largely affected by hype, and this trader's views would seem to be mere speculation. But why and how did he arrive at such a conclusion? Let's take a look at some of his reasons.

  • Weekly Burns

Alpaca Finance buys back and burns a portion of ALPACA tokens every week. So far, 40 weeks of burns have been conducted. At the rate the burns are happening, up to 34% of the total supply could be burned in a year! As supply reduces the token would become more scarce which should lead to price growth.

Source 
  • Incentivized Lock-up

On December 21, Alpaca Finance announced the creation of a governance vault where ALPACA holders can stake their tokens and earn rewards. Staking temporarily removes tokens from the market, and should stimulate growth in the price just like burning. 

  • Emission Reduction

Currently, the rate of emission of ALPACA is 2.75 tokens per block. According to the block rewards schedule, by January 2022 the emission will drop to 2.20 tokens per block. Thus, the rate at which the circulating supply increases will drop slightly. A small increase in buying pressure on ALPACA should then have a bigger impact on the price.

  • Active Development

Alpaca Finance updated its roadmap on December 8. The revised roadmap includes growth strategies such as multi-chain expansion, targeted product development for institutions, and new incentives that will reward long term holders. 

According to the day trader, these characteristics are all positive and should rub off on the value of $ALPACA. Check out 0x8day0trader's Twitter thread to see the full list of the reasons why he feels bullish about $ALPACA.


Agree or Disagree?

What our dear crypto trader has done is called fundamental analysis - a technique used to determine whether a token is undervalued or overvalued. But in crypto-space, there are no guarantees. An analysis may look good, but bear in mind that what makes any crypto grow in value is increased demand and inflow of new investment. So, though Alpaca's metrics seem convincing, do not just take it at face value: you must independently do your own research (DYOR). And if you must invest because of another person's sentiments such as 0x8day0trader's, remember this investment advice: spread out your portfolio and only invest the money which would not affect your financial balance if lost.


What is Alpaca Finance?

Alpaca Finance touts itself as the biggest lending protocol that allows leveraged yield farming on BSC.  It is a community-owned project that allows lenders safe and stable yield and borrowers to get loans for leveraged yield farming positions undercollateralized. Their leverages allow borrowers to multiply their farming principles and the resulting profits.

Alpacas are a virtuous breed. That’s why Alpaca Finance prides itself on being a fair-launch project with no pre-sale, no investor, and no pre-mine. From the beginning, the project has always been a product built by the people, for the people––or as the Alpaca team likes to say: by the Alpacas, for the Alpacas.

Where to find Alpaca Finance:

Website | Twitter | Medium | Github | Discord | Telegram

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