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ZeroLend to Wind Down Operations After Three Years Amid Liquidity Decline

ZeroLend to Wind Down Operations After Three Years Amid Liquidity Decline

Deadshot Ryker announced ZeroLend’s closure, citing sustainability issues and operational risks, with the protocol prioritizing asset withdrawals and partial LBTC refunds during wind-down.

LBTC

Fact Check
Multiple high-authority and high-relevance primary sources consistently report that ZeroLend is shutting down after operating for approximately three years, and that the primary reason cited in official communications is a decline in liquidity. Several platforms, including Binance Square, TheStreet, Phemex News, Bitget News, AInvest, and MEXC, all reference direct or official statements from ZeroLend confirming the shutdown, the duration of operations, and liquidity-related challenges. Although some sources mention additional contributing factors such as low activity, oracle issues, and revenue challenges, these do not contradict the core claim about liquidity decline being a key driver. The information is consistent across independent reports and appears to be based on ZeroLend’s own announcements, reducing the likelihood that the statement is false. There is no credible evidence contradicting the statement, and the broad agreement among varied outlets with access to official material supports a high-confidence, likely_true assessment.
Summary

In an official statement by team member Deadshot Ryker, ZeroLend confirmed it will shut down after three years, citing sustainability challenges and mounting operational risks. The decentralized lending protocol, active across multiple blockchains, has experienced declining liquidity, discontinued oracle support, and heightened security threats. Users are encouraged to promptly withdraw funds, as markets have been set to a 0% loan-to-value ratio, halting borrowing activities. Partial refunds for LBTC holders affected by the February 2024 exploit on Base will be funded through the LINEA token allocation. Asset recovery on low-liquidity chains remains a priority during the wind-down phase.

Terms & Concepts
  • Lending protocol: A DeFi platform where users supply assets to earn interest and borrow against collateral, typically managed by on-chain rules.
  • Oracle: A service that delivers external data (e.g., asset prices) to blockchains, enabling smart contracts to function with real-world inputs.
  • Loan-to-Value ratio (LTV): A metric in lending that compares the value of a loan to the value of the collateral; in DeFi, low or 0% LTV limits borrowing capacity.