Solana-Based DeFi Protocol Everlend Finance shuts down

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Key takeaways:

  • The lending app from Everlend Finance has been discontinued. It has been suggested to users to remove their assets.
  • The crypto lender has attributed the closure to the market’s lack of liquidity.

Everlend, a DeFi lending and borrowing platform based in Solana, announced that it is discontinuing the project and all further development. The initiative cited a lack of liquidity and the general decline in the borrowing and lending industry as the reasons for its demise in yesterday’s announcement. Everlend declared:

“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,”

Even with a big enough runway, the project claimed that carrying on with the protocol’s operation and development would be “gambling.” Everlend has changed the withdrawal-only setting on its app and advises users to take their deposited funds out of the protocol. The statement states that until all withdrawals have been completed, the up will be open for withdrawals. 

According to the project’s announcement, the protocol’s codebase would also become open-source, allowing anyone to use what we’ve created and carry on the work. Within the next two weeks, all cash will be raised, and the remaining balances will be paid out.

Due to the DeFi lending sector’s liquidity shortage, Everlend claims that abandoning the platform in order to operate in the present would be a gamble. According to information from DeFiLlama, the platform had a total locked value of around $400,000 at the time of its termination.

Everlend mentions a liquidity constraint as a result of the DeFi ecosystem on Solana moving away from Serum, which served as the primary source of liquidity for almost all of the projects in the ecosystem. This changed when it was discovered that the project’s private keys were kept at the cryptocurrency exchange after FTX’s demise in November.

Finding a suitable substitute has been difficult because Serum’s liquidity pools supported a large portion of the Solana DeFi ecosystem and made access to liquidity incredibly efficient.

Everlend Finance is the second DeFi lender with a Solana location to cease operations in 2023. Friktion, a DeFi yield platform with offices in Solana, shut down its lending app in January as a result of issues the crypto industry was having.

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