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Friday, February 23, 2024

Solana’s Cardinal shuts down citing economic conditions

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Solana’s Cardinal protocol is winding down operations due to economic conditions, nearly a year after raising $4.4 million to improve nonfungible tokens (NFT) utility. According to an announcement on Twitter, withdrawals should be made by August 26. 

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

Based on the closing schedule, part of the operations will be halted on July 19, including staking pool creations, token management, NFT rentals and rental extensions, social media handles and new deposits. Withdrawals must be completed by August 26, when the two-month notice period ends.

“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.”

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In July of 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 — sister company of now bankrupted crypto exchange FTX. According to a spokesperson for Cardinal, Alameda’s investment was “a very small piece of the round”, not contributing to the protocol’s financial difficulties.

Another $750,000 was raised from Neo Ventures in pre-seed funding in 2021. In total, Cardinal’s 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 slowly maturing. According to a recent report from DappsRadar, the NFT market had a good start to the year, with Q1 2023 being the best quarter since Q2 2022. Although March saw a decrease in trade volume, the overall performance remained strong due to intense competition between NFT marketplaces.

Magazine: 4 out of 10 NFT sales are fake: Learn to spot the signs of wash trading

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