Algorand’s (ALGO) largest decentralized finance protocol, Algofi, will wind down because current events have made its continued operations non-viable, according to a July 10 statement.
“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.”
The Algofi team said the protocol would be set to a “withdrawal-only mode” and shut down all social media accounts except its Discord channel “to ensure seamless, unified communication.”
The winding down process is expected to take several months, during which the team will reduce the collateral factors of the digital asset markets on its platform, allowing liquidity to migrate to other protocols.
Meanwhile, the Algofi team reiterated their belief that Algorand’s blockchain technology and its novel consensus algorithm remain strong.
Algofi is a lending protocol built on Algorand that allows users to earn interest, borrow and swap against their ALGO tokens. Since the beginning of the year, the protocol has outperformed rival DeFi platforms, with the total value of assets locked on the protocol peaking at over $120 million in February. However, that has dropped to $33.03 million at the time of writing, according to DeFillama data.
Algorand’s DeFi TVL on the decline
Following Algofi’s announcement, the total value of assets locked on Algorand fell by more than 3% to $59.84 million, making it the second top loser of the last 24 hours, according to DeFillama data.
Meanwhile, this decline continues a downward trend that began in April when the U.S. Securities and Exchange Commission (SEC) classified the digital asset as a security.
While the Algorand Foundation has disputed the SEC’s classification, the ALGO token is experiencing a price rut culminating in the token dropping to $0.11107—a level not seen since 2020.
The post Algorand’s largest DeFi protocol Algofi to shut operations appeared first on CryptoSlate.
