Solana-Based Lifinity To Shut Down, Return $43.4M To Holders

Key Highlights:

• Lifinity will return $43.4 million in USDC from its treasury and development funds.
• LFNTY tokens holders can redeem their tokens for around $0.90-$1.10 each.
• Any unclaimed funds will be redistributed after one year.

Lifinity, an early DeFi project that was started on Solana, has decided to shut down after the community voted to end the protocol. The decision was revealed on December 18, 2025 through social media platform X.

The team could have easily just walked away and ended the protocol but they are returning the remaining funds to the users by converting around $43.4 million from its treasury and development fund into USDC and distributing it to LFNTY token holders.

Each of these tokens will be probably redeemed for about $0.90 to $1.10. This redemption process will begin in about nine days. Any funds that remain unclaimed after one year will be redistributed to those who have already claimed the tokens before.

What is Lifinity?

Lifinity was one of the first DeFi trading platforms that was launched on the Solana platform in 2022. The platform on Solana was able to stand out because it used its own funds to provide liquidity, which later on helped protect its users from any kind of sudden loss, which usually happens when the prices move fast.

The platform, instead of using fixed prices like most trading platforms do, Lifinity updates prices using oracle based mechanism, which helped trades work better when prices were moving fast.

The platform also introduced flare NFTs so that it could raise funds for liquidity and used trading fees to buy back its own LFNTY tokens. In this way, the platform was solidifying its own  system.

Over time, the platform managed to handle more than $149 billion in total trading volume, while long-term token holders earned rewards and voting power by locking their tokens and staying active in governance.

Reasons for Shutdown

Lifinity is shutting down not because it failed or it was hacked, but because Solana’s DeFi space has grown way more competitive as of now. The ecosystem is now full of newer and bigger platforms like Raydium, Orca, and Phoenix, and they are all attracting more users, liquidity, and trading activity.

As Lifinity’s trading volumes fell, it earned less in fees, making it too expensive to keep running using its own funds. Instead of continuing with losses or subsidies, the community decided to close the protocol and return the money to the holders.

This decision comes as Solana’s overall DeFi ecosystem is growing strong, with more efficient platforms, making Lifinity’s exit a strategic one from an overcrowded market.

Shutdown Process Explained

According to SolanaFloor, Lifinity is shutting down in a very careful and structured way. With this structured shut down, the platform wants to make sure that all the remaining funds are protected and fairly returned.

All the assets held by the protocol, including tokens, open positions, reserves and the development fund, are being combined and converted into about $43.4 million worth of USDC. A snapshot of LFNTY token holders will decide who is eligible to receive funds.

Starting in about nine days, holders can use a simple redemption page so that they can exchange their tokens for cash, with each token expected to be worth between $0.90 and $1.10.

The payout is proportional, which means that everybody gets a fair share based on how many tokens they hold and the process is checked to make sure that there are no errors.

As stated above, if anyone does not claim their funds within a year, the leftover USDC will be automatically distributed to those who have already redeemed, allowing Lifinity to shut down fully without leaving unused funds or ongoing risks.

Also Read: Coinbase Integrates Solana DEX, Opening Access to 100M Users