DeFi Project Shuts Down Due to Lack of Sustainable Funding
Decentralized finance (DeFi) protocol focused on perpetual futures trading using Liquid Staking Tokens (LSTs) and Liquid Restake Tokens (LRTs), has officially announced the termination of its operations due to insufficient funding.
In a statement released by the Zaros team, developers cited five months of extensive effort exploring transformation strategies, extending funding runways, and evaluating strategic alternatives. Despite these efforts, the team admitted that sustainable financing could not be secured.
What Went Wrong?
The team identified two critical factors behind the project’s failure:
- Monolithic Product Launch: Instead of deploying the protocol in stages, Zaros released the entire product at once. This approach created significant challenges, especially given the system’s customized architecture, which made integration with existing liquidity sources difficult and slowed development progress.
- Premature Token Issuance: The $ZRS token was launched before the product was live, creating a mismatch between utility and value. This undermined investor confidence and constrained funding options as development delays mounted.
“The timing of the ZRS token launch, paired with the full-stack release and a lack of plug-and-play liquidity compatibility, put us at a serious disadvantage,” the team noted.
Backed by Major Investors
Zaros had completed a $1.8 million investment round on May 23, 2024, with support from well-known backers such as SNZ Holdings, Seven Capital, Cogitent Ventures, and DCI Capital, alongside prominent industry figures including Antony Sassano, Fernando Martinelli, Kieran Warwick, Andy Chen, and Kevin Lu.
Despite a strong start and a vision to innovate within DeFi derivatives, the project’s financial model proved unsustainable.
Kosta Gushterov
Reporter at Coindoo
Kosta has been a part of the team since 2021 and has solidified his position with a thirst for knowledge, incredible dedication to his work and a “detective-like” mindset. He not only covers a wide range of trending topics, he also creates reviews, PR articles and educational content. His work has also been referenced by other news outlets.