Decentralized lending protocol ZeroLEnd is winding down operations after three years, citing unsustainable economics amid inactive blockchains and rising safety threats.
The protocol, which ran crypto lending markets throughout numerous blockchains, mentioned sustained efforts could not overcome challenges reminiscent of value knowledge suppliers dropping assist and shrinking liquidity on networks like Manta, Zircuit, and XLAYER. These points and fixed hacker threats have made it unsustainable.
“Mixed with the inherently skinny margins and excessive threat profile of lending protocols, this resulted in extended intervals the place the protocol operated at a loss,” the workforce said in an official replace.
Lending markets reminiscent of ZeroLend are blockchain platforms the place customers deposit their cryptocurrencies to earn curiosity (like a financial savings account), whereas others borrow these property by placing up collateral. Consider it as peer-to-pool lending with out banks.
Oracle suppliers present real-time value knowledge to lending markets reminiscent of ZeroLend. After they drop assist, it breaks the lending markets, making them unreliable or unattainable to run.
The shutdown underscores harsh realities: fleeting liquidity, persistent exploits, and dwindling investor curiosity in broader corners of the digital asset market proceed to check DeFi protocols.
ZeroLend’s workforce mentioned its prime precedence is making certain that “customers can safely withdraw their property” from the protocol.
For property caught on low-liquidity chains reminiscent of Manta, Zircuit, and XLAYER, the workforce will replace the good contracts on a set schedule to liberate as a lot as doable. Customers have to withdraw shortly, as most markets have been set to a 0% loan-to-value ratio, which suggests no borrowing is allowed.
LBTC holders on Base get partial reduction
Lombard Staked Bitcoin, or LBTC, a year-bearing model of bitcoin utilized in DeFi lending on ZeroLend’s markets on Coinbase’s Layer 2 community Base, skilled an exploit in February final 12 months, The attacker used a solid LBTC as collateral to empty liquidity.
Customers who deposited LBTC there’ll get partial refunds funded by the workforce’s LINEA drop allocation. The announcement known as on affected customers to contact moderators or file assist tickets for the refund.
“We kindly ask all affected LBTC customers to contact the moderators or submit a assist ticket so we are able to keep direct communication and coordinate the following steps. For token holders, this marks the conclusion of the ZeroLend journey,” the workforce mentioned.
“Please withdraw any remaining property and attain out by means of official assist channels in case you want help. Thanks for being a part of ZeroLend,” it added.
