- Friktion is encouraging consumers to remove their money from the protocol.
- Nonetheless, the underlying protocol will continue to be available on-chain.
According to a statement released on January 26th, the Solana decentralized finance (DeFi) platform Friktion is closing down its user interface. And encouraging consumers to remove their money from the protocol.
Due to the platform’s website switching to a withdrawal-only mode for all Volts, deposits are no longer possible. According to Friktion’s website, its Volts are structured products for DeFi investments. That provide investors with a cut of the profits made by investment pools.
Friktion has made the difficult decision to sunset its user platform, a process beginning with moving all Volts into Withdrawal-Only mode on Friktion’s User Interface https://t.co/zrRbHgr6FV starting 25 Jan 2023.
— Friktion⚡ (@friktion_labs) January 27, 2023
Nonetheless, the underlying protocol will continue to be available on-chain. The business claims that the move was motivated by the difficult market for DeFi advancement in recent months.
Domino Effect Continues
Before the crypto winter of 2022, Friktion’s app had approximately 20,000 user wallets, had passed $3 billion in traded volume, and had achieved over $160 million in total value locked (TVL). Undercollateralized lending was introduced in November 2022 to cater to the demand from institutional investors for DeFi.
Nearly a year after announcing $5.5 million in a financing round in January 2022. The firm has decided to shut down its user interface. It was backed by a diverse group of investors, including Jump Crypto, DeFiance Capital, Delphi Ventures, Solana Ventures, and Tribe Capital.
Moreover, Alameda Research, a subsidiary of FTX, was one of the board members at the time of the exchange’s demise in November 2022. Other companies represented on the board were Genesis Trading, LedgerPrime, CMS Holdings, and Orthogonal Trading. Both Genesis Trading and FTX have filed for Bankruptcy and it seems the domino effect is affecting more firms.
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