Developers say building the borrowing and lending protocol is “no longer a viable path” for Algorand.
Algofi, the borrowing and lending protocol built on decentralized finance blockchain Algorand, will soon shut down.
According to a July 11 announcement, developers’ “belief in the strength of Algorand’s technology and novel consensus algorithm has not wavered,” however, the Algofi platform will nevertheless wind down soon:
“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.”
Starting Sept. 1, collateral factors of ALGO, vALGO, STBL, USD Coin (USDC), goBTC, and goETH markets on both Algofi V1 and V2 will be reduced from around 80% to 0% by the beginning of December. In addition, the current Liquidity Mining programs will be “halted and no future proposals will be enacted.” The Algofi protocol had $25 million in total value locked at the time of publication, down from its $135 million peak in February.
In April, the U.S. Securities and Exchange Commission charged cryptocurrency exchange Bittrex with operating an unregistered exchange in the U.S. Algorand was one of six tokens deemed to be a security by the SEC. The SEC alleged the token’s security-like characteristics to be partly linked to Algorand’s initial coin offering in 2019.
On June 13, cryptocurrency exchange eToro halted ALGO, MANA, MATIC and DASH trading for U.S. customers, citing a “rapidly evolving regulatory landscape.” To date, 68 cryptocurrencies are currently seen as securities by the SEC.
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