Algofi, a decentralized finance lending protocol built on the Layer 1 blockchain Algorand, plans to shutter operations by the quit of the one year. Algofi, which facilitates lending, borrowing and trading, raised $2.9 million from investors, including a pre-seed round led by Y Combinator.

In a July 11 announcement, Algofi’s builders acknowledged they’d decided to wind down the protocol, citing a “confluence of events” that had taken place of living which had rendered declaring the protocol unviable.

“We are in a position to launch sunsetting the platform and keep the platform in withdrawal-finest mode,” the builders acknowledged.

“That is clearly no longer the quit result any of us on the team or within the neighborhood hoped for at the outset of this project,” they added.

Starting up place Sept. 1, collateral components of ALGO, vALGO, STBL, USDC, goBTC, and goETH will be reduced from 75% to 0% by December, on both V1 and V2 lending markets. Ongoing liquidity mining programs will be halted and no future proposals would be enacted.

Till the announcement, Algofi accounted for more than half of of Algorand’s $41 million in Total Value Locked (TVL). Over the closing 24 hours, on the different hand, Algofi’s TVL dropped 60% to under $14 million.

Earlier this one year, the U.S. Securities and Commerce Commission (SEC) named Algorand a security, alongside with five other tokens, in a lawsuit towards crypto alternate Bittrex. The SEC’s characterization came despite comments made by Chairman Gary Gensler a number of years prior, praising the Algorand blockchain and announcing “you might per chance presumably develop Uber on high of it.”