The Rise and Fall of Saddle Finance: From the High Profile to the End of Liquidation

Saddle Finance was once considered a serious competitor to Curve. In 2021, the project successfully raised $11.8 million through two rounds of funding, with investors including several well-known institutions.

However, recently the Saddle community proposed to terminate operations and liquidate funds. Data shows that Saddle Finance's total locked value (TVL) is only 3.68 million USD, and the market value of its governance token $SDL has also dropped to 917,000 USD. How did this situation come about?

! Saddle Finance's Falls: From Curve's Strong Competitor to Liquidation Close

One of the main differences between Saddle and Curve is the underlying code. Saddle ported Curve's Vyper code to Solidity, which allowed Saddle to avoid the security issues that Curve had recently encountered.

In January 2021, Saddle received $4.3 million in seed rounds from top investment institutions when it was officially launched. Before going live, the project was also audited by several well-known security agencies. Although Saddle did not issue governance tokens initially, the market generally expects that there will be token issuances in the future. Together, these factors drove Saddle's high profile when it went live.

However, too high expectations also pose problems. In the early days of the launch, a large number of liquidity providers poured in, resulting in an imbalance in the proportion and price of the asset pool, resulting in the loss of some users.

In November 2021, Saddle announced the issuance of governance tokens and the start of liquidity mining rewards, airdropping 15% of the total amount of tokens to users. In mid-2022, $SDL tokens went into circulation. In addition to this, a number of other projects also offer additional rewards to Saddle's early liquidity providers.

However, on April 30, 2022, Saddle suffered a major security incident. Its sUSDv2 pool was attacked, with a loss of about $11 million. While $3.8 million of that was recovered by security team BlockSec, the incident dealt a severe blow to user confidence. Saddle's TVL dropped sharply to $120 million from $280 million before the attack.

The subsequent collapse of UST further impacted Saddle, causing its TVL to drop again to $70 million, and it has not been able to recover since.

Recently, the Saddle community proposed a liquidation scenario, proposing to dissolve the community and distribute the remaining assets to token holders. The main reasons include the planned departure of the core team, potential security risks, and the fact that the value of the treasury exceeds the market value of the token. At present, the majority of the community supports liquidation, but the details of its implementation are still disputed.

This case illustrates the rapid rise and fall of cryptocurrency projects, as well as the fierce competition and potential risks in the DeFi space.

! Saddle Finance's Falls: From Curve's Strong Competitor to Liquidation Close