October 4, 2023 at 15:12 GMTModified date: October 4, 2023 at 15:12 GMT
October 4, 2023 at 15:12 GMT

Yield Protocol to shut down by December

The DeFi lending protocol will permanently wind down all of its operations by the year’s end.

Yield Protocol to shut down by December

Yield Protocol is preparing to cease all of its operations by the end of this year. The decision was made after careful consideration with its various stakeholders.

The Wednesday announcement also mentioned the cancellation of the launch of its March 2024 fixed rate series. As of today, only December 2023 series will remain active for borrowing and lending, which will end by 31 December this year.

However, the firm will continue to provide full support until the end of the December 2023 series, after which support will be provided for withdrawals only for a limited time.

On 29 December, the remaining series is set to mature as well, ending all borrowing and lending on Yield Protocol. Liquidity providers for the March-September (MS) strategies won’t accrue any further fees too.

The protocol added: “While we think that the future is bright for DeFi and fixed rate markets in DeFi, we felt this decision was necessary because there is currently not sustainable demand for fixed-rate borrowing on Yield Protocol.”

Another reason that contributed to this decision has been the difficult and vague regulatory environment that firms in the industry are faced in the US. The protocol also noted the increasing regulatory requirements in Europe and the UK, making it challenging to continue to support the Yield Protocol.

Ending the note, the team said: “We have enjoyed working on the Yield Protocol, and we thank all those that have supported us during these years. We are proud that the many contributions we have made live on in other fixed rate protocols and the wider Ethereum community.”

The DeFi lending project had over $22m in total value locked (TVL) at its peak in April 2022. However, since then, this figure has dropped to around $2m.

The ongoing year has been a witness to various protocol shutdowns. Back in July, lending protocol Geist Finance, running on the Fantom network, shut down permanently. This was a result of losses from the Multichain exploit where its oracles misreported Multichain token values after the event.

Failing to provide reliable information, these oracles listed values of the non-bridged, or “real”, versions of each coin, which were more than four times the value of their Multichain derivatives.

Another case has been that of None Trading, which is a trading tool for cryptocurrencies and non-fungible tokens (NFT) built on Discord. A “critical exploit” within its infrastructure led to its shut down too. This then caused loss of a significant amount of funding as well as team tokens that were crucial for its operations.