Crypto lending platform Maple Finance has decided to stop lending on the Solana blockchain.
In a Dec. 14 blog post outlining the platform’s 2023 strategy, Maple said the “strategic decision” to drop Solana was in aid of focusing on Ethereum, which it describes as “the dominant chain.”
A singular focus on Ethereum will enable the development team to make greater improvements to its existing interface, said Maple. The team also cited Ethereum’s transition to Proof-of-Stake as a motivating factor, saying the blockchain is no longer subject to frictions that would have otherwise been a put-off for Maple’s users.
“More than that, the Ethereum ecosystem is thriving and the obvious entry point for institutions participating in digital asset technology,” said the Maple team.
Solana’s DeFi ecosystem took a hit following the collapse of FTX. Over the last few weeks, funds have continued to leave the blockchain evidenced by a shrinking Total Value Locked (TVL). Data from DeFi Llama shows that TVL fell from ahead of $900 million on Nov. 7 to around $290 million at the time of writing.
Meanwhile, Ethereum’s TVL currently sits at $24 billion and accounts for nearly 60% of all the value locked into DeFi protocols across chains. Still, even Ethereum’s TVL is down considerably from the same time last year, when it stood at over $100 billion.
The slowdown in DeFi activity is an anticipated consequence of the industry-wide downtrend driven by a series of black swan events over the course of this year. Maple Finance’s loan book, with over $50 million worth of bad debt, is an example of the financial distress encountered by most protocols operating today.
Maple hopes that new contracts and product features, including diversifying with real-world assets, in an upgraded “2.0” version of its protocol will bring more opportunities on-chain. The upgrade also calls for giving pool delegates the ability to declare an early default and liquidate loans if a borrower doesn’t pay within a certain period.