Solana DeFi project Friktion shuts down its user platform

Solana decentralized finance (DeFi) platform Friktion is shutting down its user interface and urging customers to withdraw their assets from the protocol, according to a statement on Jan. 26. 

The project’s website will no longer deliver the same services, operating in a withdrawal-only mode for all Volts and making deposits unavailable. Friktion’s Volts are structured products for DeFi investments that allow investors to earn a share of the revenue of investment pools, according to the company’s page.

Friktion has made the difficult decision to sunset its user platform, a process beginning with moving all Volts into Withdrawal-Only mode on Friktion’s User Interface https://t.co/zrRbHgr6FV starting 25 Jan 2023.

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— Friktion⚡ (@friktion_labs) January 27, 2023

The underlying protocol, however, will remain accessible on-chain. As cited by the company, the “tough market for DeFi growth in recent months” was the driving force behind the stakeholders’ decision:

“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’s application reached nearly 20,000 user wallets, passing $3 billion in traded volume and achieving over $160 million in total value locked (TVL) in the first half of 2022 before being impacted by the crypto winter. In November 2022, the company even launched undercollateralized lending targeting institutional investors’ demand for DeFi. 

The decision to shut down its user interface comes nearly a year after the company announced it had raised $5.5 million in a funding round in January 2022. Investors in the round included Jump Crypto, DeFiance Capital, Delphi Ventures, Solana Ventures and Tribe Capital among others.

Among the names on the platform’s board was Alameda Research, FTX’s sister company that played a crucial role in the exchange’s collapse in November 2022. Other board members included Genesis Trading, LedgerPrime, CMS Holdings and Orthogonal Trading.

Friktion did not immediately respond to Cointelegraph’s requests for comments.