[AIP-6] Limiting Access to Automated Vault


Due to strong demand for Automated Vaults and potentially limited capacity, some community members have requested that the core team put up some sort of limitation on who can invest in the Automated Vaults.

Based on the current pool’s APR and liquidity, we estimate that an additional ~200 Mn TVL can be accepted by the Automated Vaults at current metrics. While this number is not small, we believe that the demand will be higher, given a good track record so far of the vaults’ performance and the current market conditions.


By limiting access to certain Automated Vaults, we can add value to the Alpaca ecosystem and give privileged access to valued community members. So far, we have launched 3x and 8x Automated Vaults. Their characteristics have several differences (APY, Sharpe Ratio, max drawdown.) Depending on their goals, investors can choose a vault that is more suitable for them. So far though, the 8x vault has been more popular given its higher APY. And because of its higher leverage, the capacity gets filled up quickly, recently within minutes of launch.

Given the facts above, after an internal discussion, we are proposing categorizing Automated Vaults into two groups and limiting their access as follows:

  • Low-Leverage Vaults: allow public access to <= 4x Automated Vaults
  • High-Leverage Vaults: limit access for > 4x pools Automated Vaults to only xALPACA holders

While we have only offered 3x and 8x automated vaults so far, in the future, we could potentially offer other leverage -e.g, 4x, 5x, etc., vaults on LP pairs with lower underlying yields such that the APY is comparable to the higher yield pool such as BNB-USDT. Our goal is to keep the Vault’s APY roughly the same across different LP pools to minimize decision making / rotation for users to seek higher yield, which would cost gas and swap fees.


Only xALPACA holders will be able to invest in the high-leverage vaults. The max amount a user can invest in all pools will correspond to the xALPACA balance they have. We propose a linear & dynamic allocation quota as described below:

Linear: the more xALPACA you hold, the higher allocation you get:


2 xALPACA = $1 total allocation across all high-leverage vaults.

  • Example: Alice has 10,000 xALPACA, she is entitled to invest up to $5,000 USD across all high-leverage vaults.

Dynamic: ratio will be adjusted periodically based on ALPACA price.

  • Example: current ratio is 2xALPACA = $1 allocation. ALPACA price increases by 100%, the new ration becomes 1xALPACA = $1 allocation, maintaining a constant $ ratio allocation.

Other Implementation Notes:

  • The allocation refers to equity value. So $1 allocation means you can supply $1 worth of asset to have $8 TVL in the vault (for 8x vault)
  • We will track the amount invested in each vault’s smart contract (and not # of share token in the wallet.) So users cannot game the system by transferring the token out of their wallets to gain additional allocation.
  • xALPACA balance will be determined in real-time (or weekly snapshot pending implementaion challenges), on-chain, at the time of the investment
  • It would add considerable implementation effort to account for cross-chain xALPACA balance, so the initial implementation will only be for BNB Chain stakers for access to high-leverage vaults on BNB Chain.
  • While this topic is in discussion, we will pause opening new high leverage vaults until the implementation of this proposal is completed (if passed.) Lower leverage vaults will continue to be added on a regular basis if the capacity is full in all the active vaults.
  • The estimated time for implementation is 2-3 weeks (once we add it to the sprint) If passed, you can expect it to go live towards the end of May.
  • We can’t do anything with the existing investors in the current high leverage vaults. However, once they withdraw, they can only invest back again if they meet the criteria.


For absolute clarity and fairness, we will do a series of two votes for this AIP.

First Vote: To determine if we should limit the access to high-leverage vaults to xALPACA holders. This will be a simple YES or NO vote.

Second Vote: If the first vote passes, we will then have a second vote to determine the parameters for limiting access to the vaults.

Based on the discussion and feedback so far, and in an effort to move this proposal forward in a reasonable time, I would like to propose that we lock in some of the mechanisms below:

  • Allocation will be across all high-leverage vaults
  • Linear Allocation
  • Dynamics ratio, adjusted on a monthly basis at the beginning of each month. To prevent manipulation, we will use TWAP of ALPACA for the 1 week prior to the ratio adjustment.

Voting will be on setting the xALPACA allocation ratio only.

Option1: $1.0 worth of ALPACA locked for $1 allocation

Option2: $1.5 worth of ALPACA locked for $1 allocation

Option3: $2.0 worth of ALPACA locked for $1 allocation

Option4: $2.5 worth of ALPACA locked for $1 allocation

Option5: $3.0 worth of ALPACA locked for $1 allocation.

For example, with ALPACA current price of $0.66, option#1 would require $1 / $0.66 = 1.5 xALPACA for $1 allocation. option#2 would require $1.5 / 0.66 = 2.30xALPACA for $1 allocation.

I have created a Google Sheet to help make sense of these options: Limited Access to AV - Google Sheets


How will the second voting work if we don’t have a clear 50% winner?

Also I think I’ll vote for the 1:1 ratio.
It makes it easier to understand and balances well the risks of locking your alpaca for a year in the governance vault.
Increasing the ratio would make the 8x AVs appealing only to existing alpaca investors and could de a deterrent for new investors.
At the end the purpose of this proposal should be to increase the locked Alpacas in our vault.

We can do ranked choice voting for this one.


So the proposal is that each holder can invest into each single automated vault up to limit based on his xAlpaca holding? what happened to limiting the total possible invested amount across all vaults? that you proposed in the other thread

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Having the same question regarding the limit applies. Does it apply to total equity invested in all 8x vaults or just one single 8x vault?

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I have the same doubt, we should be more clear on that point when we start the voting.
I would have preferred that 1 xAlpaca was allowing you to invest 1$ on a single AV but i think there are some limitations on the implementation.

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I would choose option 5, because the lower the weight of blocked funds in alpaca, the higher the capitalization of Alpaca Finance is needed to comfortably invest your accumulated billions of dollars

Thus, this option will have the maximum impact on the value of the token

But then new comers me be unwillingly to have 3 times the AV investment in ALPACA token. For the herd it’s ok, but it would be a big pill for outsiders to swallow…

Option 1 is already a great achievement for us all :slight_smile:

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Personally, I would prefer it if it’s initially high and lowers over time. Especially if it’s per vault so everybody gets a chance to get in (even if it’s with a smaller amount). For example, we could start with 3:1 and if it’s not filled after x amount of time (days?) we could adjust it to 2:1, etc.

Or just start with 3:1, and lower it after the second or third new x8 vault has launched/demand has decreased


Hey! When can alpies and Gold, Silver, Green Tier NFTs get some features?

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Hello, can you clarify what will happen if the commnuity says NO to the First Vote. Will you still open 8x vaults if they are full?

Sorry for the confusion. I didn’t change all the texts to reflect that it will be across all pools. I have edited it now.


Just in case we vote YES

Will it be possible to create a smart contract on top of xAlpaca to let those people who locked tokens on Governance, but don’t have enough funds, rent their place for a share of the profit?

Thank you, now the proposal sounds better :), However, I am not sure if people that didnt see the previous thread understand fully the “across all pools” part. It would be good to put there example or describe a bit what it means e.g. the allocated amount means total amount that can be spread/used up across all of the 8x AVs combined

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If the community votes no, then we won’t implement this proposal. Will continue as before for the time being.

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No. We don’t plan to make xALPACA collateral.

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Option #1 is clearly the way to go.

The main goal of the governance should always be to maximize TVL in sensible ways.

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Hi huacayachief!
Suppose i lock ALPACA in xALPACA for 1 month.
I start to farm in Automated Vault according to my allocation balance.
After one month, when xALPACA will be unlocked, my automated valut position will be automatically liquidated???
Thank you for clarifying!

The xAlpaca is required only when you want to open a position or add funds into an AV, if your xAlpaca reduce later on your position won’t be closed.
However remember that if you lock your alpaca only for 1 month you will receive 1/12 of the possible max allocation.

your AV position would remain open even if your xAlpaca would drop to 0, however if you would withdraw the money, you would be able to invest in again only based on xAlpaca amount