Freeway claims that "the unprecedented USD rally" and market volatility were the reason for the failure of "one of Freeway's trading strategies."
Freeway, decentralized finance (DeFi) platform, has posted an extensive Twitter thread revealing the reasons for halting its services.
According to the Twitter thread shared on October 25th, Freeway was forced to halt its services due to the failure of “one of Freeway’s trading strategies,” which caused “a substantial loss.”
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The company noted that market volatility and “the unprecedented USD rally” were two factors that contributed to these losses. The company added:
The trading strategy was executed as it was programmed, but the market volatility caused a spike in margin utilization leading to the loss.
Despite the unfortunate events, Freeway is reportedly taking all the necessary steps to “secure Freeway’s remaining funds.” Moreover, the company highlighted that it's bringing new expertise to run the remaining funds and to implement recovery strategies.
In its 22-tweet threat, Freeway identified four independent recovery plans. The first plan mainly focuses on growing, managing, and maintaining the remaining funds. The second plan outlines the strategy of applications “started back in June as a diversification opportunity.”
The third recovery plan focuses on issuing new funding to a completely new project, which holds “impressive projected profitability.” Lastly, the fourth recovery plan focuses on “getting Earn and Protect off the ground, with all of its user protections safeguarded by the AuBit Reserves Foundation.”
The company summed up its post by emphasizing:
We would be grateful for your continued support and patience during that period. We know that it is common for disasters in this sector to result in no resolution. This is not our position at all.
Freeway highlighted that it aims to use voting systems to involve the community and share details of progress reports.
On October 23rd, Freeway ceased its services, citing “unprecedented volatility.” At that time, Freeway noted that its decision to halt its services was made to “manage exposure to future market fluctuations and volatility, ensuring the long-term sustainability and profitability of the Freeway Ecosystem.”
