On November 24, Ardana, a leading decentralized finance (DeFi) and stablecoin ecosystem built on Cardano (ADA), abruptly stopped development, citing “uncertainty in project funding and timing”. The project will remain open-source to builders while remaining cash balances and funds will be held by Ardana Labs “until another capable development team from the community comes along to continue our work.”
“Development on Cardano has been challenging with a lot of funding spent on tooling, infrastructure and security. This, alongside the uncertainty surrounding development completion, has led to the best course of action consisting stop the development of dUSD.”
This decision came as a shock to many due to the sudden nature of the announcement. However, it seems that problems had already been present for some time. Since July 4, Ardana has held an Initial Pool of Stakes Offering, or ISPO, to fund its operations. Unlike traditional fundraising mechanisms, developers do not receive delegated ADA from users, but rather staking rewards. Users are incentivized to continue delegating by receiving native DANA tokens as a reward.
Unfortunately, a simultaneous crash in the price of DANA, ADA, as well as the drop in Cardano staking yields from the ongoing crypto winter has caused problems for ISPO issuers. Over the past year, Ardana’s native DANA tokens have lost nearly 99.85% of their value.
In January, Ardana claims that “almost all product/smart contract development is complete. We could launch our products in a few weeks if we wanted to” and instead blamed the delay on “liquidation issues” in the Cardano network and “risk to funds of the users”. “Most users reacted negatively, blaming Ardana. One person, @LucidCiC, wrote:
“It looks like you’re blaming Cardano for your own lack of motivation and dedication. You decided to build here for a reason, and now you’re giving up. Others like Axo will come along and take all the glory.”