TLDR:
Algofi, the largest DeFi protocol on Algorand, announces it will shut down due to a “confluence of events”
Algofi will enter withdrawal mode, deactivate social media accounts, suspend liquidity programs, and reduce collateral factors
Algofi’s TVL drops by 12% after the announcement, accounting for 54% of Algorand’s TVL
Algorand faces challenges from SEC lawsuit and ALGO price decline
Algofi, the leading DeFi protocol on the Algorand blockchain, has decided to decommission its platform in the coming months. The protocol said that a “confluence of events” has made it impossible to maintain its high standards of service.
Algofi is a combined decentralized exchange and lending protocol that allows users to earn interest, borrow, and swap various crypto assets. It was launched in December 2021 and became the DeFi hub on Algorand.
According to a blog post by Algofi, the protocol will soon enter withdrawal mode, which means that it will:
Deactivate all social media accounts except its discord channel, which will be used for updates on the wind-down process
Suspend all current liquidity programs and governance proposals
Reduce the collateral factors for its lending programs over the next few months
The announcement has affected Algofi’s Total Value Locked (TVL), which has dropped by 12%, falling from $36.93 million to $32.22 million. Algofi’s TVL represents 54% of Algorand’s TVL, according to data by DeFilLama.
Despite its exit, Algofi expressed its support for Algorand and its technology. “To this day, our belief in the strength of Algorand’s technology and novel consensus algorithm has not wavered,” the protocol said.
Algorand (ALGO) has also faced difficulties in 2023, with its price dropping from $0.29 in January to $0.11 at the time of writing. The price was also affected by the SEC lawsuit against Bittrex, which classified ALGO as a security. Algorand’s TVL has also declined by 71.5% since February, reaching $58.77 million at the time of writing.