Preface by Silke Brand | Some kind of mystery lives on around the sunset of the platform. Only back in February 2022 a bunch of money was raised to build the ambitious project. On Twitter sad voices can be listened to – or as StephenEllis_PR says: “Sad to hear. Loved this product. Maybe you guys were ahead of your time a bit. Good luck on your next endeavor.”
Danny Nelson of CoinDesk tells of frictions among the founders in his report.
The official reason given by Friktion officials for the shutdown was that costs outpaced revenue, creating challenging economics for the Solana-based project.
Friktion Labs, a crypto startup that builds high-yielding structured products for decentralized finance (DeFi) traders on the Solana blockchain, said on Thursday 26th January 2023 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.
The team announced the shutdown in a blog post: “Costs have outpaced revenue,” Friktion said.
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.
“FTX hit the company and existing business hard in a difficult market,” Wlezien wrote.
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.
Both founders declined to comment on questions of internal strife.