The DeFi protocol, Algofi, has shut down its platform and transitioned it into withdrawal-only mode.

Algofi made this decision due to its inability to maintain the protocol at its high standards without the necessary support. This downturn results from a series of events that have unfolded over the years. Algofi explained this decision to its community, acknowledging its challenges in moving forward.

There has been a decline in activity on the Algorand blockchain, in which Algofi holds about 26% of its value. Despite the shutdown announcement, Algofi maintains a TVL of $11.18 million. The total TVL on Algorand has reached $ 41.49 million. In February, the figure soared past $200 million but sharply plummeted.

Total Value Locked on Algofi, Source: DeFiLlama
Total Value Locked on Algofi, Source: DeFiLlama

The team behind Algofi embarked on the project with a vision to enhance the prevailing decentralized finance infrastructure. They leveraged Algorand’s robust technology stack to create swift, scalable, and cost-effective products in areas where the existing norms were burdensome and sluggish. 

Working hand in hand with the community, the developers achieved this objective and expressed gratitude for the invaluable feedback received. Even now, their unwavering faith in the potency of Algorand’s technology and groundbreaking consensus algorithm remains steadfast. 

Their primary objective moving forward is to ensure the safe, clear, and timely execution of these steps. They encourage anyone with questions regarding the plan to reach out in Discord, where they will be actively present.

Algorand Struggles Amidst the Crypto Winter

The Algorand ecosystem has recently struggled to recover from the bear market as it attempted to gain traction. Additionally, on April 17, the Securities and Exchange Commission (SEC) classified ALGO as a security. This announcement has led to a significant decline of over 50% in the token’s price since then. ALGO is currently valued at $0.1062.

About Algofi

Algofi, an innovative DeFi hub, establishes itself as the premier platform on Algorand. Users can earn interest, borrow funds, and engage in asset swaps. Furthermore, they can access numerous other features the lending protocol provides, decentralized exchange (DEX), and stablecoin. Additionally, users gain the ability to readily access liquidity by leveraging their governance ALGOs through the Algofi Vault.

We will see whether the closing of Algofi affects the interest in the Algorand blockchain in the upcoming days.