DeFi protocol GRO considers shutting down during industry-wide correction

Author: Andrew Thurman, Blockworks; Compiler: Songxue, Golden Finance

As user activity and transaction volume decline in the DeFi space, a protocol that peaked at $70 million in total value locked (TVL) in late 2021 voted to “decommission the protocol and the DAO” on Tuesday.

In a vote passed early Tuesday morning, the GRO DAO voted to cease ongoing operations. It will redeem the remaining treasury funds directly to GRO token holders who deposited into the redemption contract.

Three options were presented: relax operations, support a two-person team to continue development, or reject the proposal entirely. It was decided to allocate $180,000 (in USDC) over three months, allowing the “Groda Pod” development team to issue a compensation contract and cease activity.

The proposal cited “a difficult market, poor performance of the Gro protocol, and the departure of key personnel” as reasons for the DAO’s decision to hold a vote.

The project was founded in 2020 by former employees of Goldman Sachs, Spotify, Morgan Stanley and Revolut. In 2021, they announced $7.1 million raised from funds including Framework, 3AC, and Nascent. At the protocol’s peak in October 2021, it had more than $68 million in stable assets deposited into its revenue aggregation and risk tiering contracts.

The vote comes at a tumultuous time for DeFi protocols. The pullback comes amid a general decline in Ethereum user activity.

DeFi protocol transaction volume will hit a new low in 2023, with monthly users of popular lending protocols such as Aave already down 40% from annual highs.