Algofi, the largest decentralized finance protocol on layer-1 blockchain Algorand, said it will shut down following a "confluence of events" that meant it could no longer be maintained to its highest standard.

The platform, which offers lending, borrowing and trading, will shortly move into withdrawal-only mode, a blog post said.

"To this day, our belief in the strength of Algorand’s technology and novel consensus algorithm has not wavered," Algofi added in the post.

Algofi was set up during the peak of the previous bull market, when algorand (ALGO) was trading at $1.85, and before crypto markets entered a prolonged decline that saw ALGO slump to as low as $0.09 last month.

The drop, coupled with an aggressive stance by the U.S. Securities and Exchange Commission (SEC) as it recently labeled algorand as a security, has stunted the growth of DeFi projects on the previously hyped blockchain.

Total value locked (TVL) on Algorand currently stands at $59 million, a sharp drop from February's more than $200 million, according to DefiLlama data.

Despite seeing its TVL slump by more than 10% since the announcement was made, Algofi still accounts for more than half of the value on the Algorand blockchain, which now holds the least amount of value since the start of 2022.