Bad Debt Fully Covered, Sui Ecosystem Lending Protocol AlphaFi to Wind Down in an Orderly Manner

Odaily News: Sui ecosystem DeFi protocol AlphaFi has announced it will wind down in an orderly manner and has now entered maintenance mode. Withdrawals remain open, but new deposits and borrowings are no longer accepted. AlphaFi stated that some borrowing positions in AlphaLend collateralized with ALPHA became undercollateralized, resulting in bad debt for the protocol. After the Sui Foundation security team discovered the issue, it worked together with the project team to address it. The bad debt has now been fully covered, and the protocol remains solvent, with user funds safe.

As part of the wind-down arrangements, users should close positions and withdraw assets. Slush Strategies users can now withdraw funds directly from Slush Wallet. The WAL vault lock-up period has been canceled, and SUI, WAL, DEEP, and USDC strategies can be withdrawn instantly. The ALPHA vault has also ceased operations and its lock-up period has been canceled.