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Solana's Cardinal Protocol Discontinues Operations Amid Economic Uncertainties
After raising $4.4 million aimed at enhancing the utility of nonfungible tokens (NFTs) less than a year ago, Solana's Cardinal protocol has announced the cessation of its operations, citing the prevailing economic climate as the cause. An official announcement on Twitter indicates that users must complete their withdrawals by August 26.
Cardinal Labs and Its NFT-focussed Services on Solana
Operating as an infrastructure provider, Cardinal Labs was dedicated to bolstering NFT applications on the Solana network. It provided various protocols and software development kits (SDKs) to facilitate staking, renting, subscribing, royalties, and trading.
As per the shutdown timetable, a portion of the operations, including the creation of staking pools, token management, NFT rentals and extensions, social media handles, and new deposits, will be discontinued from July 19. The deadline for completing withdrawals is set for August 26, marking the end of the two-month notice period.
The team behind Cardinal expressed the difficulty of maneuvering in the current complex macroeconomic landscape, having been developing for the past 18 months. They acknowledged that while NFT-based products have gained some traction, they remain confined to the realm of crypto maximalists.
Fundraising History of Cardinal Labs
In July 2022, Cardinal procured $4.4 million in a seed funding round. This funding was jointly led by crypto venture firm Protagonist and Solana Ventures, with contributions from Animoca Brands, Delphi Digital, CMS Holdings, and Alameda Research, which is associated with the now-defunct crypto exchange FTX. A representative for Cardinal stated that Alameda's contribution was minor and did not contribute to the protocol's financial struggles.
Additionally, in 2021, Cardinal secured pre-seed funding of $750,000 from Neo Ventures. Thus, over a period of 18 months, Cardinal amassed a total funding of $5.2 million, with more than 65,000 NFTs staked on the protocol as of July 2022.
The Current State of the NFT Market
Despite these trying times, there are signs of maturation in the NFT market. A recent DappRadar report suggests a promising start to the year for the NFT market, with Q1 2023 recording the highest quarter since Q2 2022. Although March saw a dip in trading volume, the overall performance held strong due to vigorous competition among NFT marketplaces.
