Solana’s Cardinal Protocol Ceases Operations

Nearly a year after raising $4.4 million to enhance the utility of nonfungible tokens (NFTs), Solana’s Cardinal protocol is ceasing operations due to the economy. According to a Twitter announcement, withdrawals are due by August 26.

Cardinal Labs was a provider of infrastructure dedicated to facilitating NFT use cases on the Solana network by providing protocols and software development kits (SDKs) for staking, rentals, subscriptions, royalties, and trading.

A portion of operations, including the creation of staking pools, token administration, NFT rentals and rental extensions, social media handles, and new deposits, will cease on July 19.

The withdrawal deadline is August 26, when the two-month notice period expires.

The Cardinal’s team stated on Twitter that while NFT-based products have gained traction, they remain “stuck in the context of the crypto maximalist community.”

Cardinal raised $4.4 million in July 2022 in a seed funding round co-led by crypto venture firms Protagonist and Solana Ventures, along with Animoca Brands, Delphi Digital, CMS Holdings, and Alameda Research, a sister company of now-defunct crypto exchange FTX.

According to a spokesperson for Cardinal, Alameda’s investment was “a tiny piece of the pie” and did not contribute to the protocol’s financial difficulties.

In 2021, Neo Ventures will provide another $750,000 in pre-seed funding. Over 18 months, Cardinal secured $5.2 million in funding, with over 65,000 NFTs pledged on the protocol as of July 2022.

Despite difficult circumstances, the NFT market appears to be slowly maturing. DappsRadar reported that the NFT market had a solid start to the year, with Q1 2023 being the strongest quarter since Q2 2022.

Despite a decrease in trade volume during March, the overall performance remained solid due to the intense competition between NFT marketplaces.