- The protocol will soon move to withdrawal-only mode.
- The TVL on Algofi experienced a fall of more than 12% following the announcement.
Algorand’s [ALGO] largest decentralized finance (DeFi) protocol, Algofi, is going to shut down its operations. The blockchain platform made the announcement on its blog recently.
Algofi is going to wind down its operations due to a “confluence of events” as it cannot maintain the highest standards on the protocol. It will soon move to withdrawal-only mode.
Algofi is a lending protocol based on the layer-1 Algorand blockchain that allows users to earn interest, borrow, and trade their ALGO tokens.
The blog post read,
“The team believes that going forward we are no longer able to provide the support necessary to maintain the protocol at the high standards which we believe the community deserves. We will begin sunsetting the platform and put the platform in withdrawal-only mode.”
Algofi will also disable all social media accounts except its Discord channel to maintain the required communication. It will take months to shut down the entire operation at Algofi. Meanwhile the team will work to minimize the collateral factors of the crypto market on its platform, allowing liquidity to shift to other protocols.
The team however underlined its belief in Algorand’s blockchain technology and its novel consensus algorithm.
Source: Defillama
Soon afterwards, the total value of assets locked (TVL) on the Algorand network witnessed a fall of more than 5%, and was around $58.94 million at press time.
Source: Defillama
Similarly, the TVL on Algofi experienced a fall of more than 12%.
How ALGO is trading
Remember that it was in April that the U.S. Securities and Exchange Commission (SEC) labelled ALGO and five other tokens as securities when it charged the crypto asset trading platform Bittrex for operating an unregistered national securities exchange.
Though the Algorand Foundation disputed the SEC’s classification, the market opinion of the token certainly suffered.
Since the regulator’s enforcement action against Bittrex, the value of ALGO has dipped more than 50%. However, the token braved the latest news at Algofi rather well as its token hardly lost its value.
At press time, ALGO was changing hands at $0.1114.
Source: ALGO/USD, TradingView
