[For Discussion] Migration Plan from AF1.0 -> AF2.0


Since the launches of concentrated liquidity (CL) for major DEXs on the BNB chain and the shift in farming rewards to the new CL pools, the yields and liquidity on the old UNIv2-type pools steadily declined over time, which caused the profitability of our LYF farms to also decrease.

With AF2.0 money market now operating in a stable manner and AVv3 operations getting ready to scale, it makes sense that we migrate lending assets in AF1.0 over.

With the migration of the lending assets from AF1.0 → AF2.0, AUSD will also be affected as the AF1.0’s ibTokens are used as collateral for AUSD.


We believe the migration to AF2.0 will have the following benefits:

  • Overtime, the yield and liquidity will continue to go down on the old pools, and some ofthem will reach an unsafe level and have higher risk of bad debt due to low liquidity.
  • By migrating over to AF2.0, we would lower maintenance costs and efforts so devs will have more time to focus on AF2.0 related tasks.
  • Increasing lending liquidity for AF2.0 will help support scaling for AVv3.


The migration will be done in phases, starting from first sunsetting AUSD and then migrating lending pools, starting from low utilization assets.

The high-level timeline is shown in the figure below:

Sunsetting AUSD

To sunset AUSD, we will do the following:

Step0: Notice period

  • There will be a notice period of ~ 2 weeks for users with AUSD positions to close them out.
  • Users will be able to do this via two methods
    • Buy AUSD from an open market on Ellipsis and return the debt (market price, limited liquidity)
    • Use our stable swap module to return the AUSD debt (Always at $1, unlimited liquidity)

Step1: Force Close Position

  • Any remaining AUSD positions will be forced close.
  • Force Closing will work in the following way:
    • User’s collateral is sold via stable swap (BUSD and USDT will be converted 1:1, while BNB collateral will first be sold into a stable coin and then converted 1:1 via the stable swap module)
    • Any remaining collateral will be returned to users

Migrating Lending Pools

Timeline is tentative based on how fast we past this proposal

Batch #1: Start immediately after AUSD sunsetting

  • BTCB
  • ETH
  • USDC

These assets have very low utilization and few profitable farming opportunities on AF1.0 Moreover, we have BTCB and ETH savings vaults on AF2.0 which will generate borrowing demand for these assets. Thus, they make for perfect candidates to migrate over right away.

Batch #2: ~ End of October / Early November

  • BNB
  • USDT
  • CAKE

These assets still have usages on AF1.0 and there are still people farming these pools profitably, so for these assets, we would rather wait until we are ready to scale AVv3 utilizing these two assets. We plan for this to happen by the end of October, but can be sooner if the liquidity in PCSv2 starts to drop below the safe level.

Batch #3: By the end of November

  • BUSD

Given that BUSD is being sunsetted by Binance, we will not be migrating it over to the AF2.0. However, we will just close down the remaining farming positions related to BUSD.

Similarly, ALPACA will not be migrated to AF2.0 unless we add an ALPACA farm there.

For each batch, we will implement the following steps to migrate.

Step0: Notice Period

  • there will be a notice period (~1 week) before we start executing each batch, where users can close their positions and withdraw their lending assets. After that, we will start implementing the steps below:

Step1: Disable opening new positions on the relevant farms

  • Relevant farms refer to farms that contain the migration assets in the pair.For batch #1, any farms that borrows BTCB, ETH, and USDC in the pairs will be closed.
  • For example, a BTCB-BNB farm, any positions farming this pool that borrows BTCB will be closed during batch one migration. BTCB-BNB farming positions borrowing BNB will be closed during the Batch 2 migration.
  • For a full list of the farming pairs to be included in each batch, you can visit here: AF2.0 Migration - Google Sheets

Step2: Close any remaining LYF positions

  • Any remaining positions on the relevant farms will be closed
  • Debts will be repaid to the lending pools
  • Any remaining values will be returned to the farmers wallet addresses

Step3: Move lending assets over to AF2.0

  • After all the LYF farm are closed, all assets will be migrated and deposited into their respected lending pools on AF2.0

Step4: Claim ibToken

  • Users whose assets were migrated will be able to claim their ibToken for AF2.0, the assets will then be deposited into their subaccount.
  • Please note that users will start earning lending interest on AF2.0 right away, and can claim their ibToken anytime. Claiming ibToken will allow users to be able to withdraw their assets from AF2.0

great job keep building!

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Seems like a very nice plan. Traders will naturally levitate towards rewards and the sensible thing to do is to prioritize work on AF2.0 given the current market conditions.

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I disagree.

If there’s no LYF products available for the users, please don’t shut down the LYF on AF1.0。At least, leave those pools with high TVL alone. LYF on AF1.0 are generating revenue for Alpaca and will be totally lost if we shut it down. With LYF on AF1.0, I can long or short. On AF2.0, you can only invest in AVs. That’s why many users will have to leave Alpaca.

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This was brought up by some users as well. Majority of the large pools are under Batch #2.

An alternative approach would be:

  • Execute migration for Batch #1 (little utilization, not a lot of farming opportunity)
  • Keep Batch #2 as is (continue to monitor and only shut down / migrate if liquidity in PCS gets to low to be unsafe)
  • Execute batch #3 sunset (this must be done due to BUSD wind down)
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revenue? I disagree.
It’s more like risk. Low liquidity in pancake v2 could cause lots of bad debts. We even didn’t get recovered from last one, stBNB.
Close it and I believe that alpaca team can give us a bettter product in AF2.0.

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Thanks huacayachief,

I agree with your susggestions.

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Hi everyone. I have put together an AIP for this topic. Any further discussion should be made in the new thread. This thread will now be closed.