AlgoFi, the largest decentralized finance protocol on layer-1 blockchain Algorand, announced it will be shutting down due to a confluence of events that made it difficult to maintain the platform to its highest standard. The platform, which offers lending, borrowing, and trading, will soon move into withdrawal-only mode.
To this day, our belief in the strength of Algorand’s technology and novel consensus algorithm has not wavered, AlgoFi stated in a blog post. The platform was set up during the peak of the previous bull market, when Algorand (ALGO) was trading at $1.85. However, the crypto markets have since entered a prolonged decline that saw ALGO slump to as low as $0.09 last month.
The drop, along with the U.S. Securities and Exchange Commission (SEC) labeling Algorand as a security, has stunted the growth of DeFi projects on the previously hyped blockchain. Total value locked (TVL) on Algorand currently stands at $59 million, a sharp drop from February’s more than $200 million, according to DeFiLlama data.
Despite the announcement, AlgoFi still accounts for more than half of the value on the Algorand blockchain, which now holds the least amount of value since the start of 2021.