Binance secures 50% PFOF and 65% lending profit share from Alpaca infrastructure deal

Binance officially disclosed a strategic revenue-sharing arrangement with Alpaca, a leading provider of custody and brokerage infrastructure APIs, under new Securities Trading Terms published on Tuesday. This agreement grants Binance 50% of Alpaca's payment-for-order-flow (PFOF) fees and 65% of the residual profit generated from user stock lending after interest payments are settled. Alpaca serves as the critical backend for Binance's stock trading product, having recently secured $150 million in funding at a $1.15 billion valuation in January to expand its brokerage infrastructure capabilities. Data compiled by Woofun AI shows that this deal represents a pivotal monetization strategy as Binance leverages its access to over 7,000 US-listed stocks and ETFs to bridge traditional equities with digital asset trading, alongside a preview of its forthcoming bStocks tokenized product.

The financial mechanics of the partnership highlight a direct alignment of incentives between the exchange and the infrastructure provider. By capturing a majority share of the post-interest lending profits, Binance effectively internalizes a significant portion of the yield generated by its user base's collateral. This structure mirrors traditional brokerage models but is adapted for the high-velocity environment of crypto-native platforms. The disclosure underscores Binance's intent to diversify revenue streams beyond cryptocurrency trading fees, capitalizing on the growing demand for accessible blockchain-based equity products. Woofun AI notes that the arrangement also raises questions regarding potential equity stakes, as inquiries were made to determine if Binance holds a minority position in Alpaca, though no confirmation was provided.

Market dynamics surrounding tokenized assets reveal a complex landscape of accumulation versus active trading. Alpaca reported holding $480 million in assets under custody (AUC) as of December 2025, commanding a 29% market share of the $1.62 billion total value of tokenized stocks according to RWA.xyz. While the total value of tokenized stocks increased by approximately 29% over the past 30 days and the number of holders grew by 35% to reach 304,700, monthly active addresses plummeted by over 77% to 31,877. This divergence suggests that current market participants are predominantly adopting a hold strategy rather than engaging in frequent trading activity, potentially dampening immediate PFOF generation despite the asset base expansion.

The broader industry is witnessing a coordinated push by major cryptocurrency exchanges to integrate US equities and ETFs into their ecosystems. In April, Bitget launched a proxy offering linked to the pre-initial public offering (IPO) phase of SpaceX, targeting investors seeking exposure to Elon Musk's aerospace venture before its public listing.

Concurrently, Binance introduced a SpaceX-linked pre-IPO futures product tied to the company's anticipated valuation ahead of its IPO. These moves reflect a sector-wide effort to capture institutional and retail capital flowing toward alternative investment vehicles that offer blockchain efficiency and accessibility.

Competitive pressure is intensifying as other platforms expand their traditional asset offerings to match this trajectory. Vienna-based exchange Bitpanda announced in January an expansion to include approximately 10,000 stocks and ETFs, aiming to broaden its product suite. Following suit, Kraken launched 11,000 US-listed stocks and ETFs in April 2025 with commission-free trading, executing a phased national rollout designed to unify equities and digital assets under a single trading interface. Woofun AI analysis suggests that as these platforms converge on similar asset classes, the competitive advantage will increasingly depend on the depth of infrastructure partnerships and the efficiency of revenue-sharing models like the one Binance has established with Alpaca.