Yield Protocol Ceases Operations in December 2023
Date: 2023-10-04 Author: Dima Zakharov Categories: CRYPTO PAYMENTS, IN WORLD
Yield Protocol, which offered lending and borrowing services in the cryptocurrency space, has announced its closure, with lending and borrowing programs set to halt on December 29th of this year. The decision comes as a result of unstable demand for loans with fixed interest rates and a complex regulatory environment.
Closing of Yield Protocol: Why Did This Happen?
Developers of the Yield Protocol have declared the project's closure, signifying the cessation of lending and borrowing programs on the platform. The primary reason cited by the creators is the instability in demand for loans with fixed interest rates. This instability could be attributed to shifting user preferences and market dynamics.
Furthermore, developers mentioned that complex regulatory conditions in the United States, along with tightening cryptocurrency regulations in the European Union and the United Kingdom, exerted additional pressure on the protocol. Regulatory uncertainty can create long-term sustainability risks for the project, leading developers to make the decision to shut it down.
Consequences of Closure
The closure of Yield Protocol means that all lending programs with fixed rates will come to an end. This includes a program scheduled for March 2024, which will not be implemented. Liquidity providers (LPs) who participated in this program will not be able to receive additional fees, potentially impacting their interest in participating in future projects.
Support and Shutdown Process
Developers of Yield Protocol have pledged to continue supporting the project until the conclusion of the current borrowing program on December 29, 2023. After this date, a limited period will be provided for fund withdrawals. This decision aims to ensure the safety and convenience of users who may have assets within the protocol.
History and Funding of Yield Protocol
Yield Protocol was launched in October 2020 on the Ethereum blockchain. It provided the capability for fixed-rate, collateralized loans and lending services, utilizing fyTokens, an ERC-20 standard token, for collateral redemption.
In June 2021, Yield Protocol successfully raised $10 million in a Series A financing round. The financing was conducted with the participation of venture firm Paradigm and other investors, including Framework Ventures, Symbolic Capital Partners, CMS Holdings, Variant, and DeFi Alliance. Allan Nimerg served as the CEO of Yield Protocol, and the company was headquartered in Chicago.
