- DeFi lending platform ZeroLend announced it will shut down after three years, citing an unsustainable business model.
- The platform’s native token, ZERO, plummeted 45% in 24 hours and has lost 99.4% of its value over the past year.
- The closure is part of a broader trend of DeFi platforms, including Alpaca Finance and Polynomial, winding down due to liquidity pressures and thin margins.
- Co-founder “Ryker” blamed declining on-chain activity, infrastructure challenges, and rising security risks for the decision.
- The project, which raised $3 million in a 2024 seed round, counts ConsenSys and Polygon Ventures among its backers.
Decentralized finance lending platform ZeroLend is winding down operations after three years, a move that caused its native token to crash as the project cited unsustainable challenges. The multi-chain platform, focused on Layer 2 solutions, made the announcement on Discord, with co-founder “Ryker” stating “the protocol is no longer sustainable in its current form,” in a message later reshared on X.
Consequently, the ZERO token plunged 45% to $0.06696, according to CoinGecko data, extending a catastrophic 99.4% yearly loss. This collapse follows a $3 million seed funding round in 2024, backed by firms like Consensys and Polygon Ventures.
However, ZeroLend is not an isolated case in the struggling DeFi sector. Last May, yield farm Alpaca Finance shuttered after operating at a loss, while derivatives platform Polynomial recently closed, tweeting that “solid tech doesn’t win in derivatives.”
Ryker specifically pointed to fragmented liquidity and lack of oracle support on some chains as key issues. He noted that the protocol’s growth attracted more attention from malicious actors, exacerbating the already thin margins common in lending markets.
Meanwhile, Deigo Martin, CEO of Yellow Capital, told Decrypt that fragmented liquidity across exchanges and blockchains creates unstable pricing. He argued unified liquidity is essential for merchant confidence and lasting institutional adoption in the crypto space.
The ZeroLend team now says it will focus on an orderly wind-down process. They have urged all users to withdraw their remaining funds from the platform promptly.
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