Algofi Shutdown: Will It Impact Algorand Blockchain?

2023/07/12 04:50

In Brief

Algorand-based DeFi protocol, Algofi is winding down operations due to inability to maintain high standards.
After the shutdown announcement, Algofi still has a TVL of $30.73 million, contributing more than 50% to Algorand's TVL.
The SEC deemed Algorand a security in April, leading to a decrease in token price by more than 50% to $0.1084.

Algorand-based decentralized finance (DeFi) protocol, Algofi has announced the closure of its platform. The project contributed more than 50% to Algorand’s total value locked (TVL)

With the crypto winter, many projects had to shut down their platforms due to difficulties and contagion effects. While the crypto market tries to bounce back from the winter, Algofi has announced it is winding down operations.

Algofi Goes Into Withdrawal-Only Mode
Algofi announced the shutdown of its platform and put it in withdrawal-only mode. The team wrote on Twitter:
“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.”

The team plans to wind down its operation “in a safe, clearly communicated and timely fashion.” They said they would solve any of the community’s queries on Discord.

According to data from Crunchbase, Algofi raised funding of $2.9 million through seed rounds in November 2021.

Future of Algorand (ALGO)?
Algofi contributed more than 50% to Algorand’s TVL. Even after the shutdown announcement, Algofi has a TVL of $30.73 million, while the total TVL on Algorand is $58.77 million.

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That said, the community is now speculating on the future of ALGO as more than 50% of TVL will eventually be withdrawn.

In January 2023, the Algorand ecosystem was trying to emerge from the bear market. BeInCrypto reported that its TVL was up by 123% in one week, and Algofi had a triple-digit gain.

But on April 17, the Securities and Exchange Commission (SEC) deemed ALGO a security, and the token price has decreased by more than 50% since then.

As of writing, ALGO is trading at around its 2020 levels at $0.1084.

Disclaimer
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content.