Solana’s Cardinal protocol is ceasing operations due to economic conditions, after raising $4.4 million approximately a year ago to enhance the utility of nonfungible tokens (NFTs).
The protocol recently announced on Twitter that users should make their withdrawals by August 26.
Cardinal Labs, an infrastructure provider, had focused on supporting NFT use cases on the Solana network by offering protocols and software development kits (SDKs) for various purposes, including staking, rentals, subscriptions, royalties, and trading.
As per the closing schedule, certain operations will be halted on July 19.
These include staking pool creations, token management, NFT rentals and rental extensions, social media handles, and new deposits.
Users are required to complete their withdrawals by August 26, when the two-month notice period ends.
The Cardinal team expressed their efforts to navigate the challenging macroeconomic environment since their inception 18 months ago.
They acknowledged that NFT-based products have gained traction but mentioned that they have remained confined within the crypto maximalist community.
In July 2022, Cardinal raised $4.4 million in a seed funding round co-led by Protagonist, a crypto venture firm, and Solana Ventures, along with participation from Animoca Brands, Delphi Digital, CMS Holdings, and Alameda Research, the sister company of the now-bankrupt crypto exchange FTX.
A spokesperson clarified that Alameda’s investment constituted a small portion of the funding round and did not contribute to the protocol’s financial difficulties.
Neo Ventures also provided $750,000 in pre-seed funding in 2021. In total, Cardinal secured $5.2 million in funding over 18 months, attracting over 65,000 staked NFTs on the protocol by July 2022.
Despite the challenging times, the NFT market is gradually maturing.
A recent report from DappRadar indicates that the NFT market had a promising start to the year, with Q1 2023 being the best quarter since Q2 2022.
Although trade volume decreased in March, overall performance remained strong due to intense competition among NFT marketplaces.
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