The largest DeFi protocol based on Algorand has closed
Date: 2023-07-13 Author: Karina Ziganova Categories: BUSINESS
Representatives of the project said that the decision to close Algofi was influenced by a "combination of circumstances"
The largest lending protocol in the Algorand ecosystem, called Algofi, is shutting down. This was announced by representatives of Algofi in the project blog. What exactly caused the closure is unclear. According to the statement, the decision was influenced by a certain "combination of circumstances", but Algofi decided not to disclose the details.
At the same time, the developers claim that their "faith in the power of Algorand technology remains unshakable." The project team announced plans to gradually close the project so as not to cause a sharp outflow of liquidity. Algofi also clarified that they will transfer the site to a unilateral mode for the withdrawal of cryptocurrencies. However, the timing of the closure of the protocol remains unclear.
Algofi was one of the largest lending protocols based on the Algorand network. According to DeFiLlama, back in February 2023, there was about $200 million of client money in the project's wallets. However, starting in March, liquidity on Algofi began to decline rapidly. At the time of writing, Algofi has placed just over $42 million.
The first signal of problems around Algorand sounded just in March 2023. Then the American cryptocurrency exchange Coinbase curtailed the ALGO staking service for its customers. The closure of staking took place against the backdrop of claims by the Securities and Exchange Commission (SEC) against the exchange. It turned out that the regulator found violations in the Coinbase business, but the details were not disclosed.
In mid-April 2023, the reason for the closure of ALGO services on Coinbase became known: the SEC classified the token as a securities. It is noteworthy that back in 2019, at the MIT conference, the current head of the SEC, Gary Gensler, referred to Algorand as an "excellent technology" that supports "high throughput" for interacting with smart contracts.
