Algofi will soon operate as a withdrawal-only protocol.
In an unexpected turn of events, Algofi, the paramount decentralized finance (DeFi) protocol functioning on Algorand's Layer-1 blockchain, is preparing for closure.
The upcoming termination results from a complex interplay of factors that have hindered its potential to sustain high-quality operations.
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According to the official blog post shared on July 10th, Algofi, known for its advanced provisions for lending, borrowing, and trading, will promptly transition into a withdrawal-exclusive operation.
In the blog post, the team behind Algofi expressed unflinching faith in Algorand.
To this day, our belief in the strength of Algorand’s technology and novel consensus algorithm has not wavered.
Established during the height of the last bull market cycle, Algofi's origins can be traced back to when Algorand's native token, ALGO, was valued at $1.85. The subsequent downturn in the cryptocurrency market led to a drastic decrease in ALGO's value, hitting a low of $0.09 last month.
Such a downfall, caused by the US Securities and Exchange Commission (SEC) categorizing Algorand as security in recent lawsuits against Binance and Coinbase, has severely impacted the progression of DeFi projects on the previously lauded blockchain.
This move by SEC came as a surprise, considering that before becoming the SEC Chair in 2019, Gary Gensler praised Algorand as a "great technology."
As per data from DefiLlama, Algorand's total value locked (TVL) currently stands at $59 million. This figure represents a significant fall from February's $200 million.
Despite a decrease in TVL by over 10% following the announcement, Algofi continues to encapsulate over half of Algorand's value. The current value of the Algorand blockchain is the lowest it has been since the inception of 2022.
