Crypto: Defi Lender Zerolend Shuts Down, Blames Illiquid Chains 2026
ZeroLend founder “Ryker” says several blockchains the lending protocol operates on are now “inactive,” leading to periods where it has operated at a loss.
Decentralized lending protocol ZeroLend says it is shutting down completely after the blockchains it operates on have suffered from low user numbers and liquidity.
“After three years of building and operating the protocol, we have made the difficult decision to wind down operations,” ZeroLend’s founder, known only as “Ryker,” said in a post the protocol shared to X on Monday.
“Despite the team’s continued efforts, it has become clear that the protocol is no longer sustainable in its current form,” he added.
ZeroLend focused its services on Ethereum layer-2 blockchains, once touted by Ethereum co-founder Vitalik Buterin as a central part of the network’s plan to scale and remain competitive.
However, Buterin said earlier this month that his vision for scaling with layer 2s “no longer makes sense,” that many have failed to properly adopt Ethereum’s security, and that scaling should increasingly come from the mainnet and native rollups.
ZeroLend’s Ryker said the reason for the shutdown is that several blockchains the protocol supported “have become inactive or significantly less liquid.”
He added that in some cases, oracle providers — services that fetch data and are often crucial to running protocols — have stopped support on some networks, making it “increasingly difficult to operate markets reliably or generate sustainable revenue.”
“At the same time, as the protocol grew, it attracted greater attention from malicious actors, including hackers and scammers,” Ryker said. “Combined with the inherently thin margins and high risk profile of lending protocols, this resulted in prolonged periods where the protocol operated at a loss.”
He added that the protocol will ensure users can withdraw their assets, adding, “We strongly encourage all users to withdraw any remaining funds from the platform.”
Source: CoinTelegraph
