DEX Sparkswap Built On The Lightning Network To Shut Down Due to Sustainability Issues
Sparkswap Exchange announced on March 17 that they are shutting down and are set to stop trading operations within the next week. The decentralized crypto exchange noted through a medium post that they have already ceased any onboarding via their sign-up portal. It further plans to terminate the lightning node supporting its ecosystem by end of March.
We've made the tough decision to shut down Sparkswap. Effective today, we won't be accepting new users or new USD deposits. Existing users will have until 3/24/20 to make any final BTC purchases.
To learn more, read here: https://t.co/EW1Bwq4GAN
— Sparkswap (@sparkswap) March 17, 2020
This platform is barely three years old and came to the limelight after securing a $3.5 million VC funding. The round was led by Pantera Capital and other notable players in the industry; one would not have expected the sudden wind up. According to the company’s founder, Terry Griffith, this downfall is mainly attributed to sustainability issues;
“Unfortunately, we weren’t able to build a large enough audience to sustain the business over the long term.”
“Building a cryptocurrency business, especially one that interacts with the fiat banking system, is an expensive endeavor, and as it stands right now the style of self-custody we were espousing is too niche to make our business sustainable.”
Despite the closure of business, Terry assured Sparkswap clients that their funds are intact with AnchorUSD who have been the exchange’s banking partner. They have also incentivized withdrawal by waiving any fees until April ends. Apart from that, the medium post presented Sparkswap users the option of leveraging AnchorUSD services;
“AnchorUSD has mobile applications for iOS and Android, and offers a High Yield USD Interest account as well as mobile crypto trading.”
Sparkswap finally highlighted that they will still monitor developments within Bitcoin and lightning network closely. They also plan to actively contribute in blockchain and crypto communities whose agenda is to advance FinTech innovations.
The past few months have been particularly rough for the DeFi space especially with the rise of cryptonative arbitrage. It is therefore no surprise that projects like MakerDAO suffered a $4.5 million discrepancy while most are on the brink of extinction despite hailing as Blockchain 3.0 solutions.