March 27, 2024
Latest Cryptocurrency News

Solana’s Cardinal Protocol Shuts Down Operations Amid Economic Challenges

Solana’s Cardinal protocol is ceasing operations due to economic conditions, nearly a year after raising $4.4 million to enhance the utility of nonfungible tokens (NFT). As per a Twitter announcement, withdrawals should be made by August 26.

Cardinal Labs, an infrastructure provider dedicated to supporting NFT use cases on the Solana network, offered protocols and software development kits (SDKs) for staking, rentals, subscriptions, royalties, and trading.

According to the closing schedule, certain operations will be halted on July 19, including staking pool creations, token management, NFT rentals and rental extensions, social media handles, and new deposits. Aug. 26 marks the end of the two-month notice period, and withdrawals must be completed by then.

“We’ve done our best to navigate this incredibly difficult macroeconomic environment since we began building 18 months ago, but like for many others, it has been challenging,” said the Cardinal’s team on Twitter, adding that while NFT-based products have seen some real traction, they remain “stuck in the context of the crypto maximalist community.”

In July 2022, Cardinal raised $4.4 million in a seed funding round co-led by crypto venture firm Protagonist and Solana Ventures, along with Animoca Brands, Delphi Digital, CMS Holdings, and Alameda Research, the sister company of now bankrupted crypto exchange FTX. A spokesperson for Cardinal clarified that Alameda’s investment was “a very small piece of the round” and did not contribute to the protocol’s financial difficulties.

An additional $750,000 was raised from Neo Ventures in pre-seed funding in 2021. Overall, Cardinal secured $5.2 million in funding over the course of 18 months, with over 65,000 NFTs staked on the protocol as of July 2022.

Despite challenging times, the NFT market seems to be slowly maturing. According to a recent report from DappRadar, the NFT market had a strong start to the year, with Q1 2023 being the best quarter since Q2 2022. Although March witnessed a decrease in trade volume, the overall performance remained strong due to intense competition among NFT marketplaces.

Image by on Freepik

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