Algofi to shut down amid faded activity on Algorand (ALGO) blockchain

The leading decentralized finance (DeFi) platform in Algorand, Algofi, will suspend its services as the Algorand blockchain suffers deteriorate activity.

⚡ NEWS: Algofi, a leading DeFi protocol, announces shutdown due to decreased activity on Algorand blockchain, leading to concerns. #DeFi #Algofi #Algorand

— Codex  (@CodexTrader) July 11, 2023

Their latest blog post indicated that the protocol will launch withdrawal-only mode soon. Moreover, it indicated that Algofi has encounter challenges in ensuring high standars.

“.. a confluence of events has taken place that no longer makes building & maintaining the Algofi platform to the highest standards a viable path for our company.”

Algofi offers trading, lending, and borrowing services on the layer1 blockchain Algorand. The protocol launched during the previous crypto market peak, promising to improve existing DeFi infrastructure. That’s when ALGO traded at $1.85 before a prolonged cryptocurrency winter that saw the altcoin exploring the $0.09 lows last month.

Algorand’s native coin changed hands at $0.1094 during this publication, losing around 0.85% over the past day.

Algorand’s struggle

Indeed, Algorand has lost the hype it enjoyed in the DeFi marketplace. Besides the prolonged crypto winter, the latest clampdowns by the United States Securities and Exchange Commission ruined sentiment for the token.

The SEC attacked multiple cryptos during the recent regulation wave, citing securities law violations. Meanwhile, that triggered delisting on top trading platforms. For instance, eToro delisted alts that failed to satisfy the regulator, including Algorand (read more here).

Declined ALGO TVL

DeFiLlama data shows Algorand’s total value locked recorded sharp declines, crashing from February’s $200 million to current values of $58.94 million.

Though Algofi’s TVL has plummeted by around 10% following the announcement, the DeFi protocol still accounts for around 55% of Algorand’s value.

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