The company made the announcement on Twitter on February 1 and said that, despite having “enough runway” to continue operating, doing so would be risky given the state of the market. The Everlend’s team specifically noted:
“Unfortunately, there is just insufficient rn liquidity, and the B/L market, which Everlend is entirely dependent upon, is continuously shrinking. In these circumstances, moving forward is a risk. We chose to halt now even though we had an adequate runway.”
What Everlend users should do
The Solana decentralized finance (DeFi) protocol added that until the funds are cleared, the app will only allow withdrawals while deposits from underlying protocols are now in vaults. “We advise our users to withdraw their cash immediately.”
The team declared that any cash raised and unclaimed, as well as payments to third parties for services rendered, will be “covered” in the next two weeks, signifying that all parties concerned will be compensated in full. The protocol’s codebase will also be made available as open source, enabling others to continue developing solutions on it.
Everlend was established in 2021, and its goal for the upcoming months included the introduction of its money market and governance platform. The protocol has GSR, Serum, and Everstake Capital as investors.
DeFi Llama claims that at its height, Everlend had approximately $400,000 in total value locked (TVL). But with FTX’s demise, the protocol experienced a considerable decrease, which had a detrimental effect on market liquidity.
Everlend is the second DeFi protocol based in Solana to shut down in a short period of time as a result of crypto winter. On January 27, the Friktion platform made the decision to shut down its user interface, claiming a “difficult market for DeFi growth.”