As user activity and volumes in the DeFi space decline, a protocol that peaked at $70 million in total value locked (TVL) at the end of 2021 voted to “unwind the protocol and DAO” on Tuesday .
In a vote passed early Tuesday morning, the GRO DAO voted in favor of effectively ceasing ongoing operations. It will buy back the remainder of its treasury directly from GRO token holders who deposit into a buyback contract.
Three options were presented: end operations, support a two-person team for continued development, or reject the proposal altogether. The decision was made to allocate $180,000 (in USDC) for a period of three months, allowing the “Groda Pod” development team to release the repayment contract and cease operations.
The proposal cited “a challenging market, Gro protocol underperformance, and key departures” as extenuating circumstances leading to the decision to submit an existential vote to the DAO.
The project was founded in 2020 by former employees of Goldman Sachs, Spotify, Morgan Stanley and Revolut. In 2021, they announced a $7.1 million raise including funds such as Framework, 3AC and Nascent. At the protocol’s peak in October 2021, it had over $68 million in stablecoin deposits in its yield aggregation and risk spreading contracts.
The vote to cease comes amid a difficult time for DeFi protocols. The sector’s overall TVL has fallen from a peak of $1.05 billion in April to just $80 billion as of today. The withdrawal comes amid a broader slowdown in user activity on Ethereum.
The number of users of popular DeFi protocols is particularly slow. Weekly Uniswap volume is poised to print new lows for 2023, and monthly users of popular lending protocols such as Aave have slumped 40% from annual highs.
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