As user activity and volumes in the DeFi space decline, a protocol that peaked at $70 million in total value locked (TVL) at the end of 2021 voted Tuesday to “wind down the protocol and the DAO.”
In a vote passed early Tuesday morning, the GRO DAO voted to effectively halt ongoing activities. It will return the remainder of its treasury directly to GRO token holders who pay into a redemption contract.
Three options were presented: scale down operations, support a two-person team for further development, or reject the proposal entirely. It was decided to allocate $180,000 (in USDC) for a period of three months, allowing the “Groda Pod” development team to release the reimbursement contract and cease operations.
The proposal cited “difficult market, underperformance of the Gro protocol and significant deviations” as extenuating circumstances that led to the decision to submit an existential vote to the DAO.
The project was founded in 2020 by former employees of Goldman Sachs, Spotify, Morgan Stanley and Revolut. In 2021, they announced a $7.1 million raise, including funds like Framework, 3AC and Nascent. At the protocol’s peak in October 2021, it had more than $68 million in stables deposited in its return aggregation and risk tranching contracts.
The vote to phase out comes amid a rough patch for DeFi protocols. The industry’s total TVL has fallen from a high of $1.05 billion in April to just $80 billion currently. The pullback comes amid a broader decline in user activity in Ethereum.
User numbers for popular DeFi protocols are particularly slow. Uniswap’s weekly volume is expected to set new lows for 2023, and monthly user counts for popular lending protocols like Aave are down 40% from yearly highs.