Altcoin Solana’s Cardinal protocol, which aims to increase the use of immutable tokens (NFTs), is shutting down due to economic conditions. After raising $4.4 million in funds, the protocol announced on Twitter that withdrawals must be completed by August 26. As part of the closing program, certain transactions will end on July 19. It will also mark the end of a year-long effort to support NFT use cases on the Solana network.
Altcoin-focused Cardinal Labs’ role in NFT development
Cardinal Labs has played a pivotal role in the altcoin Solana network, serving as an infrastructure provider for NFTs. Its protocols and software development kits (SDKs) have facilitated staking, rental, subscription, royalty and trading within the Solana ecosystem. However, economic difficulties led to the decision to cease operations.
As part of the closing process, various transactions close on July 19. These include staking pooling, token management, NFT lease and lease extensions. It also includes social media handles and new deposits. Users are advised to complete withdrawals by August 26, the end of the two-month notice period.
Challenges in the macro environment and NFT market context
The Cardinal team acknowledged the challenges they have faced in navigating the macroeconomic environment over the past 18 months. They noted that while NFT-based products are gaining traction, the market remains confined to the crypto maximalist community. Despite the team’s efforts, economic conditions proved challenging for Cardinal’s operations. Cardinal raised $4.4 million in a seed funding round in July 2022 with key participation from Protagonist, Solana Ventures, Animoca Brands, Delphi Digital, CMS Holdings and Alameda Research. Alameda Research’s investment makes up a small portion of the funding. But it did not add to the financial difficulties of the protocol.
Additionally, Cardinal raised US$750,000 in pre-seed funding from Neo Ventures in 2021. As of July 2022, more than 65,000 NFTs had been invested in the protocol. The maturation of the NFT market is evident, as highlighted in a recent report by DappRadar. cryptocoin.com As we mentioned, despite some trading volume fluctuations in March, the 1st quarter of 2023 was the strongest quarter since the 2nd quarter of 2022 thanks to the fierce competition among the NFT markets.
Altcoin Solana’s decision to terminate the operations of the Cardinal protocol reflects the difficult economic conditions it faces. The closure comes nearly a year after NFT raised substantial funds to improve its service. The NFT market is showing signs of maturation. However, Cardinal’s closure highlights the complexities and uncertainties that projects may face in the evolving crypto environment.
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