The official reason given by friktion_labs officials for the shutdown was that costs outpaced revenue, creating challenging economics for the Solana-based project. But there was more to the story, realDannyNelson reports.
Friktion Labs, a crypto startup that builds high-yielding structured products for decentralized finance traders on the Solana blockchain, said late Thursday that it was shutting down its user platform, citing the challenging “economics” of the current market climate.
Behind the scenes, according to people familiar with the matter, there were also disagreements – ahem, friction – among the project’s founders.At its height in April and May of last yeart, Friktion’s so-called “volts” – deposit vaults for customer assets – held $150 million. According to the blog post, the volts are 96% off their highs, and have now been put into withdrawal-only mode.
In a direct message to CoinDesk on Twitter, Chief Technology Officer Alex Wlezien characterized the decision as an inevitable consequence of the crypto-market fallout from November’s epic collapse of Sam Bankman-Fried’s FTX exchange.Both he and CEO Uddhav Marwaha told CoinDesk in separate messages: “This is a joint decision made by our leadership team and is driven by the economics of the project.
A key contributing factor, according to several people briefed on the matter, was the founders differed on how to proceed with Friktion’s product road map.
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