Recently, Algofi, the largest DeFi project on the Algorand blockchain, announced its cessation of operations due to the current market context and challenging legal environment.
Algofi will transition to “withdrawal only” mode and close all social media accounts except for the Discord channel to maintain communication with the community.
The winding down process is expected to take a few months, and the protocol will reduce the market’s exposure to digital asset collateral while enabling liquidity to transition to other protocols.
Algofi is a lending protocol on Algorand that allows users to earn profits through borrowing and token swapping. Algofi was established during the peak of the bull market when the price of Algorand (ALGO) was trading at $1.85.
The decline in the price of ALGO token and the SEC’s allegations of it being a security have hindered the development of DeFi projects in the Algorand ecosystem. As a result, Algofi has been forced to declare its cessation of operations.