Sushiswap, a protocol built on Ethereum, has announced plans to shut down two of its services. According to the official statement, its launchpad and lending protocol will be suspended immediately. After its launch in 2020, the decentralized platform has provided users with access to several decentralized tokens while being able to carry out several activities on the platform. Users could use harware wallets to interact on the platform in contrast to platforms like Binance.
The platform will launch new products
In the explanation made available by an executive of the platform on Twitter, he mentioned that they discovered many design issues with the lending protocol. He also said the platform was already at loss and had limited funds to continue running it. In the same vein, he said that the launchpad was simply surplus to requirements, and the available funds were insufficient.
However, he mentioned that the platform has plans to launch other related products that will replace the axed ones. He also said that this would help the company focus on the exchange aspect of their service while highlighting that it is the only aspect pooling in most of the funds for the company.
Sushiswap faces a cash crunch
This recent decision is coming off the back of several struggles with funds that the platform has faced over the last few months. In a recent post released last month, the company declared that its funds would only be able to help it run for a year and a half. It also said that the situation is dire and needs to be addressed as soon as possible to keep providing users with the same level of services that it has provided over the years.
The CEO of the firm Jared Grey said that the company had been taking many measures to curb the situation. He mentioned steps like cutting costs and renegotiating contracts amid other issues. The post also noted that the firm would likely cut expenses that were not important to force expenditure back to a region of around $5 million per year. In the same thread, the CEO said Sushiswap had encountered a massive loss totaling over $30 million across the last year. He claimed that most of the losses resulted from the rewards program that the company ran and claimed that there is a plan to align TVL with LPs.