Crypto Winter Freezes Out Another - Solana DeFi Project Friktion to Shut Down
As it moves forward with a plan to suspend all of it's front-end operations, Solana based DeFi protocol Friktion urges it's users
to withdraw all of their funds from the platform. This information was announced by Friktion in a company statement dated January 26, 2023 which may be accessed by clicking here.
Friktion's web site will cease delivery of its usual services on January 25, 2023, and instead will make any new attempts at depositing unavailable. Likewise, the web site will be operating exclusively in a withdrawal-only mode for all deposited Volts. [According to the Friktion web site, Volts are the company's structured products for DeFi that provide investors the opportunity to earn a portion of the revenue earned from investment pools].
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The Friktion protocol will stay accessible, albeit, on-chain. The company stressed that it was the 'tough market for DeFi growth in recent months' that was the reason behind this decision to 'sunset'. Friktion noted that its costs were outpacing its revenues necessitating the revaluation of the company's going-forward strategy. However, the company chose this sunset path in an endeavor to provide optimal stakeholder value (including its users as well as community members).
Regarding the decision to 'sunset', Friktion noted:
This decision was not made lightly, as Friktion has successfully navigated a number of challenges in the past, including Luna, FTX, and network outages. The company remains a strong believer in the future of Solana DeFi and will continue to support the ecosystem where it can.
[Friktion. Friktion Sunset (Part 1). (Accessed January 28, 2023)].
This decision to 'sunset' comes almost one year after Friktion announced receiving $5.5 Million in a funding round by investors Jump Crypto, DeFiance Capital, Delphi Ventures, Solana Ventures and Tribe Capital, to name a few.
It is interesting to note the names of several board members of Friktion. The most noteworthy being: Alameda Research, Genesis Trading, LedgerPrime, CMS Holdings and Orthogonal Trading.
Before experiencing the effects of this crypto winter, Friktion's platform reached almost 20,000 unique users while passing more than $3 Billion of trading volume and reaching more than $160 Million in TVL. [The timeframe for these statistics being the first half of 2022]. To target institutional investors thirst for DeFi products Friktion launched undercollateralized lending products in November, 2022.
Friktion has assured its users of a smooth transition and the Friktion team and community managers will be available on the company's Discord page for the purpose of rendering assistance when needed and to answer any and all questions.
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