With FTX’s ripple effect on market liquidity, Everlend is closing its doors and urging clients to withdraw funds.
Solana decentralized finance (DeFi) protocol Everlend Finance is closing down its operations and urging clients to withdraw funds from the platform.
The company announced the decision on Twitter on Feb. 1, stating that despite having “enough runway” to continue operating, it would be a gamble under current market conditions. In particular, Everland’s team noted:
“Unfortunately, rn liquidity is just not there and this is so not just about Solana and the B/L market (on which Everlend is 100% dependent) keeps shrinking. In these conditions pressing forward is a gamble. And even though we had enough runway, we decided to stop now.”
Everlend also noted that deposits from underlying protocols are now in vaults, and the app will be in withdrawal-only mode until the funds are cleared. “[W]e suggest our users withdraw their funds asap.”
The team announced that all raised and unused funds, along with third-party contractor payments, will be “covered” in the next two weeks, indicating that relevant parties will be made whole. The protocol will also open-source its codebase, allowing others to continue building solutions on it.
We are deeply saddened to announce that as of today our team has decided to close down https://t.co/UiTuuSdyrB and won’t continue its development
— Everlend (@EverlendFinance) February 1, 2023
Founded in 2021, Everlend’s roadmap for the coming months included the launch of its governance platform and money market. Investors in the protocol included GSR, Serum and Everstake Capital.
According to DeFi Llama, Everlend held almost $400,000 in total value locked (TVL) during its peak. However, the protocol suffered a significant decline in the wake of FTX’s collapse, which had a negative impact on market liquidity.
Everlend is the second Solana-based DeFi protocol to shut down within a few days due to crypto winter. On Jan. 27, Friktion platform announced it would be closing down its user interface, citing a “tough market for DeFi growth” for its decision.
The move came nearly a year after Everlend announced it had raised $5.5 million in a funding round. In November, the company even launched undercollateralized lending targeting institutional investors’ demand for DeFi, shortly before FTX contagious struck.