Solana-based DeFi protocol Everlend to close down due to liquidity crunch

Solana based DeFi protocol Everlend to close down due to liquidity crunch

Solana-based DeFi protocol Everlend to close down due to liquidity crunch

Solana-based DeFi lending and borrowing aggregator, Everlend shared an announcement to shut down its project and its further development.

The company shared it on its Twitter, “We are deeply saddened to announce that as of today, our team has decided to close down Everlend.finance and won’t continue its development.”

The cause for the project shut was also highlighted in the announcement, lack of liquidity, and the shrinkage of the lending and borrowing market as a whole.

“Liquidity is just not there, and this is so not just about Solana, and the B/L [borrowing and lending] market (on which Everlend is 100% dependent) keeps shrinking,” said Everlend. 

According to the company, running the operations and developing the protocol even with sufficient runway will be a “gamble.”

Everlend is now encouraging its users who have deposited their funds to remove it from their protocol and has moved its app to withdrawal-only mode.

The company also shared that the protocol’s codebase would become open-source so that “anyone could use what we’ve built and continue the work.”

The liquidity crunch happened as the DeFi ecosystem on Solana moved away from serum. Solana was the main liquidity provider for most of the projects in the ecosystem. This development took place when it came to an awareness that the project’s private keys were held at the crypto exchange after the FTX collapse.

Finding an appropriate replacement has become difficult as Serum’s liquidity pools braced most of the Solana DeFi ecosystem as well as made access to liquidity really efficient.

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