AlphaFi Winds Down Sui DeFi Operations Amid Undercollateralization Issues
AlphaFi, a protocol that offers lending services through its AlphaLend platform on the Sui blockchain, has announced it will be winding down its DeFi operations due to significant undercollateralization issues. The undercollateralization led to bad debt for the protocol, prompting an investigation with the Sui Foundation and efforts to recover outstanding debt.
The team has urged users to close positions and withdraw their assets from AlphaLend and other affected protocols. Lockup periods for the WAL and ALPHA vaults have been canceled, allowing users to access their funds. However, new deposits and borrowing are currently halted as the protocol enters maintenance mode.
AlphaFi plans to continue handling withdrawals until all users have completed an exit from the Sui ecosystem. No end date has been provided for this process.