Algofi, Algorand’s largest defi protocol, to shut down due to inability to maintain standards
– Algofi announced that it will wind down its operations and move to withdrawal-only mode.
– The platform will close down all social media platforms except for its Discord channel.
– The shutdown process includes collateral factor reductions, liquidity migration, and suspension of liquidity mining.
– The decision to shut down was unexpected and not part of the original plan.
– The Algorand Foundation reassured users that the defi ecosystem is stable.
Algofi’s shutdown affects Algorand’s total value locked (TVL)
– Algofi currently accounts for over 50% of Algorand’s TVL, which is nearly $59 million.
– Algorand’s TVL dropped from $33.39 million to $30.55 million since Algofi’s announcement.
– In February 2023, Algorand’s TVL was at $204 million.
– The US SEC labeled Algorand’s native token ALGO as a security, leading to a decline in value.
– ALGO reached an all-time low of $0.098, but has slightly recovered to $0.107.
Hot Take:
The shutdown of Algofi is a setback for Algorand’s defi ecosystem. It raises questions about the platform’s ability to maintain standards and the overall stability of the Algorand network. Additionally, the classification of ALGO as a security by the SEC has negatively impacted its value. Algorand will need to address these challenges in order to regain momentum and attract users back to its defi ecosystem.
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