Solana’s Cardinal protocol, which aimed to enhance the utility of nonfungible tokens (NFTs), has announced its decision to wind down operations due to economic conditions. The protocol had raised $4.4 million in funding approximately a year ago. Withdrawals from the protocol are required to be completed by August 26, following the closure schedule.
Cardinal Labs, the infrastructure provider behind the protocol, focused on supporting NFT use cases on the Solana network. They offered various protocols and software development kits (SDKs) for staking, rentals, subscriptions, royalties, and trading. However, the team recently shared on Twitter that they have decided to initiate the process of winding down their protocols, citing the challenging macroeconomic environment faced since their inception.
The closure schedule indicates that certain operations, such as staking pool creations, token management, NFT rentals and rental extensions, social media handles, and new deposits, will be halted on July 19. The two-month notice period concludes on August 26, by which all withdrawals should be completed.
Although NFT-based products have gained some traction, the Cardinal team acknowledged that they remain limited to the crypto maximalist community. Despite raising a total of $5.2 million in funding over 18 months and having over 65,000 NFTs staked on their protocol as of July 2022, the economic challenges proved difficult to overcome.
As the NFT market gradually matures, recent reports suggest positive growth. Q1 2023 was the best quarter for the NFT market since Q2 2022, with strong performance attributed to intense competition between NFT marketplaces. Notwithstanding a decrease in trade volume in March, the overall market remains resilient.
The closure of Solana’s Cardinal protocol highlights the complexities faced by projects in the crypto space. Economic conditions and limited adoption outside crypto enthusiasts pose significant challenges. However, as the NFT market continues to evolve, industry participants are closely watching its development and exploring opportunities for sustainable growth.