Liquidity management protocol DefiEdge has blocked all deposits to its strategy contracts made from its user interface on Oct. 14, leaving users scrambling to find an alternative.
On Sept. 30, the protocol’s team announced on X that some strategies would be “delisted.” However, the new deposit block appears to affect all strategies and not just the ones that were mentioned in the post.
Withdrawals from DefiEdge are still functioning as of the time of publication.
According to a statement from a DeFi Edge representative on Oct. 14, the reason for blocking deposits is that “[w]e are transitioning towards B2B [business-to-business] liquidity management and moving away from retail liquidity management.”
The representative clarified that partner exchanges communicated the change and that liquidity providers have been supportive of it. The team has also ensured that users can withdraw directly from partner exchanges and not only from the DeFi Edge user interface, they claimed.
DefiEdge is a decentralized finance (DeFi) protocol used by investors who want to provide liquidity to decentralized crypto exchanges. It automates some of the tasks that liquidity providers have to perform, such as rebalancing their inventories and claiming fees.
The app is integrated with multiple exchanges, including PancakeSwap, Thena, Camelot, Lynex, QuickSwap and others. On Sept. 29 — the day before the DefiEdge team announced it was delisting some strategies — the protocol held over $4.8 million worth of cryptocurrency in its contracts.
Also on Sept. 30, the team announced on X that it was “delisting” some strategies used for the Camelot exchange on the Arbitrum network. It stated that users should withdraw their funds before Oct. 10, as these strategies would no longer be managed after that date.
“Attention all users: @DefiEdge will stop maintaining all its Position Manager vaults on PancakeSwap from 10 Oct 2024. Please remove your funds from their vaults before that to avoid any issues.”
As of Oct. 14, every strategy listed on the app’s interface displays a message stating, “You are not whitelisted. Please reach out in the DefiEdge Discord community.”
The strategies affected include those announced in multiple X posts on Sept. 30 and Oct. 8, as well as others that were unrelated, such as those used for QuickSwap, Thena and Uniswap.
The error message contains a link to the protocol’s official Discord channel. Cointelegraph contacted the team through Discord but did not receive a response by the time of publication.
After publication, the team clarified that whitelisting will soon become available to institutional investors. “We have decided to whitelist deposits on the platform while still allowing withdrawals,” the representative stated. They added that the team is “working with top custodians and market makers building infrastructure that would usher in the next phase of yield management at scale.”
A Gamma representative told Cointelegraph on Oct. 14 that it does not plan to require users to be whitelisted.
Update 10-14-2024, 7:09 pm UTC: This article has been updated to include portions of a statement from a DeFi Edge representative.