Algorand’s Biggest DeFi Platform Algofi Announces Plans to Shut Down
- Algofi’s decision to shut down has raised fears about the future of Algorand’s ALGO, as Algofi accounts for a chunk of the blockchain’s TVL.
- The US SEC listed ALGO on its list of unregistered securities in April.
- Algofi launched at the height of the last bull run but has struggled to find stability during this bear market.
Algofi, the biggest Decentralized Finance (DeFi) platform on Algorand, has announced plans to shut down at the end of the year, citing a “confluence of events” that has prevented it from operating as usual. It wrote in its announcement,
A confluence of events has taken place that no longer makes building and maintaining the Algofi platform to the highest standards a viable path for our company. Due to this, we will begin sunsetting the platform and put the platform in withdrawal-only mode shortly.
Algofi added that its “belief in the strength of Algorand’s technology and novel consensus algorithm has not wavered.” Algofi provides a range of crypto services, such as staking, lending, and borrowing.
Algofi launched at the height of the last crypto bull run. However, like other crypto platforms, Algofi was affected by the market and saw its price crash from an impressive $1.8.85 to as low as $0.09 last month.
Algofi’s TVL (total value locked) also dropped from $125 million in February to $13.03 million as of this writing. This figure shows the low rate of DeFi activities on the protocol, which has been triggered by a couple of factors aside from the bear market.
In April, the US Securities and Exchange Commission (SEC) claimed Algorand was an unregistered security, adding ALGO to a growing list of digital assets deemed unregistered securities.
Meanwhile, Algofi said it will conclude its operations “in a safe, clearly communicated, and timely fashion.” The team plans to respond to queries on their Discord channel.
“This is obviously not the outcome any of us on the team or in the community hoped for at the outset of this project. We can’t thank the Algorand community enough for their support throughout this journey and can’t wait to see what comes next for Algorand,” the Algofi team added.
Algofi accounts for a large percentage of Algorand’s TVL. So, it remains to be seen how its recent decision will affect the entire Algorand blockchain.
Lawrence has covered some exciting stories in his career as a journalist, he finds blockchain-related stories very intriguing. He believes Web3 will change the world and wants everyone to be a part of it.
