Algorand (ALGO) Largest DeFi Protocol Calls It Quits, TVL Drops By 5%

Algofi, the largest decentralized finance (DeFi) protocol in the Algorand ecosystem, has made the unfortunate decision to wind down its operations. The protocol will enter a “withdrawal-only mode,” closing all social media accounts except its Discord channel, as per Twitter announcement. Algofi’s closure has led to a decline in the ALGO‘s TVL on Defilama.

Algofi Shuts Down: Largest Algorand DeFi Protocol

Algofi, a prominent DeFi protocol operating within the Algorand ecosystem, has announced its decision to cease operations. The team behind Algofi recently came to the unfortunate realization that they can no longer provide the necessary support to maintain the protocol’s high standards, as expressed in their blog titled “Algofi Community Update” on July 10.

The team believes that going forward we are no longer able to provide the support necessary to maintain the protocol at the high standards which we believe the community deserves. We will begin sunsetting the platform and put the platform in withdrawal-only mode.

– Algofi, July 11, 2023

Having raised $2.8 million in funding during 2021, with notable participants including Coinbase, Y Combinator, and Jump Crypto, Algofi gained significant attention within the crypto industry. Recently, Algorand announced their protocol upgrade where the average wait time for a transaction to complete has been reduced by 400ms. Algorand CEO Silvio Micali has not yet commented on the closure.

Will It Affect ALGO Token?

Following the announcement, the total value of assets locked on the Algorand network experienced a decline of over 5%, amounting to $59.03 million. This decrease makes Algorand one of the top losers in the past 24 hours, according to data from Defillama.

The closure of Algofi comes at a time when Algorand’s native cryptocurrency, ALGO, faces regulatory scrutiny. The U.S. Securities and Exchange Commission (SEC) has classified ALGO as a security in Binanace lawsuit filed in early June, along with BNB, BUSD, SOL, ADA, MATIC, FIL.

Algorand’s native cryptocurrency, ALGO, demonstrates resilience in the market with a 0.59% increase in the past 24 hours. The current price of ALGO stands at $0.1101. It has a live market cap of $836,070,885 USD.

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