Everlend Finance suspends operations, urges users to withdraw funds

Updated: 03 February 2023

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Everlend Finance, a decentralized finance protocol running on the Solana blockchain, is shutting down its services. The platform is also urging its clients to withdraw funds from the platform as its services have been affected by the market liquidity triggered by the collapse of FTX.

Everlend Finance halts services amid liquidity issues

The announcement by Everlend Finance noted that while the company could still sustain its operations now, it was not viable for it to continue rendering services given the current market conditions, adding that it would be a gamble to do so.

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

The company said that the deposits made on the underlying protocols were being held in vaults. However, the app would not allow more deposits or any other services, and only a withdrawal option would be possible until all the customers can take out their funds.

“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,” the company said.

The company has also clarified that it will cover the raised and unused funds in the coming weeks. This shows the company’s intention in ensuring that all the involved parties are made whole despite the liquidity crunch. The protocol plans to open-source the codebase to ensure that others continue creating their solutions.

6/
All the raised and unused funds along with the incurred payments to 3rd party contractors will be covered within the next 2 weeks from today.

— Everlend (@EverlendFinance) February 1, 2023

Everlend Finance had much on its roadmap

The roadmap for Everlend Finance in the coming months had interesting things planned for by the company. One of the projects that the company was working on was the release of a money market and governance platform.

Everlend Finance is one of the popular platforms in the DeFi sector. However, the bear market that persisted for the most part of 2022 affected the DeFi space, with projects such as Celsius, Voyager, Genesis, and now Everlend Finance facing challenges.

Everlend Finance was founded in 2021, and it has attracted investments from top firms such as Everstake Capital, GSR, and Serum. A year back, Everlend Finance closed a $5.5 million funding round that raised the company’s valuation significantly.

When Everlend Capital was at its peak, the company had a total value locked (TVL) of $400,000. However, since the collapse of FTX that drained liquidity from the market, the TVL on the platform has dropped significantly.

In November, the company planned the launch of an undercollateralized lending platform targeting institutional investors. The solution targeted institutional investors that wanted to access the DeFi sector. This product was launched shortly before the collapse of FTX.

Everlend Finance is the second DeFi platform running on Solana that has halted its services because of the effects of the crypto winter. Towards the end of last month, Friktion platform, which runs on the Solana network, announced it would be shutting down its user interface because of the poor market conditions that had affected the growth of DeFi.

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