Solana’s Cardinal Protocol has made the decision to cease its operations due to unfavorable economic conditions. The protocol took to Twitter to announce the closure and advised users to withdraw their funds before August 26.
Cardinal Labs was established to support various NFT use cases on the Solana network, offering protocols and software development kits (SDKs) for staking, rentals, subscriptions, royalties, and trading.
Under the closing schedule, specific operations will stop on July 19. This includes the creation of staking pools, token management, NFT rentals and extensions, social media handle services, and new deposits. Users are required to complete their withdrawals within the two-month notice period, concluding on August 26. Any remaining assets will be forcefully withdrawn to the depositors’ addresses, according to Cardinal.
In a statement, Cardinal acknowledged the challenging macroeconomic environment they have faced since their inception 18 months ago. They also noted that NFT-based products gained significant traction but remained within the context of the crypto maximalist community.
Despite this disappointing news, Solana’s price has surged and is currently trading at $17.62, reaching a three-month high. SOL has exhibited stronger recovery compared to Bitcoin and Ethereum, with a price increase of over 10% in the past day.
Solana’s price is now approaching a critical level at $17.61, last tested in March. If it surpasses this level, it would mark a significant milestone and further boost positive sentiment surrounding the cryptocurrency.
The unexpected price reaction can be attributed to an undisclosed announcement made by Cardinal, which seems to have resonated positively with the market. However, the closure of Cardinal has had a negative impact on Solana NFTs, causing a significant decline in their value within a short period of less than 48 hours.
MagicEden, a prominent NFT marketplace on Solana, experienced a substantial drawdown of 78% in daily transactions. On June 27, the number of transactions plummeted from 125,000 to 27,000, indicating a setback for Solana NFTs and their market performance.