Decentralized lending protocol ZeroLEnd will end operations after three years, citing blockchain inactivity and rising security threats as an unsustainable economy.
The protocol, which runs crypto lending markets on multiple blockchains, said ongoing efforts cannot overcome challenges such as price data providers dropping support and shrinking liquidity on networks such as Manta, Zircuit and XLAYER. These issues and the constant threat of hackers make it unsustainable.
“Coupled with the thin margins and high-risk profile inherent in the loan agreement, this has resulted in the agreement being in the red for a long period of time,” the team said in an official update.
Lending marketplaces like ZeroLend are blockchain platforms where users can deposit cryptocurrencies to earn interest (much like a savings account), while others borrow against those assets by providing collateral. Think of it as peer-to-peer lending without banks.
Oracle providers provide real-time price data to lending marketplaces such as ZeroLend. When they withdraw support, it disrupts loan markets, making them unreliable or unable to function.
The shutdown highlights a harsh reality: ephemeral liquidity, persistent vulnerability exploits, and declining investor interest in the broader digital asset market continue to test DeFi protocols.
The ZeroLend team says its top priority is ensuring “users can safely withdraw assets from the protocol.”
For assets stuck on low-liquidity chains such as Manta, Zircuit, and XLAYER, the team will update the smart contracts according to a set schedule to release the assets as much as possible. Users need to withdraw money quickly because most markets have set loan-to-value ratios at 0%, meaning no borrowing is allowed.
Base’s LBTC holders receive partial relief
Lombard Staked Bitcoin (LBTC for short), the vintage version of Bitcoin used for DeFi lending on the ZeroLend market on Coinbase’s layer 2 network Base, experienced an attack last February in which attackers used fake LBTC as collateral to drain liquidity.
Users who deposited LBTC there will receive a partial refund funded by the team’s LINEA drop allocation. The advisory calls on affected users to contact moderators or submit a support ticket to receive a refund.
“We kindly ask all affected LBTC users to contact the administrators or submit a support ticket so that we can maintain direct communication and coordinate next steps. For token holders, this marks the end of the ZeroLend journey,” the team said.
“If you need assistance, please withdraw any remaining assets and contact through official support channels. Thank you for being a part of ZeroLend,” it added.
