Paradigm Labs, a startup working on decentralized finance (DeFi) projects, is shutting down its business, citing the inability to come up with a market-resilient product.
Announced on Wednesday, the decision was propagated by Liam Kovatch, CEO of the project, on a Medium blog in which he admitted that the team was unable to find a market fit product even after the development process of two years.
"After almost two years of active research and development, our team has come to the decision that without significant product-market fit and limited resources to pursue emergent opportunities, the kind of success we envisioned for Paradigm Labs is unlikely," Kovatch noted.
"Out of respect to all of our stakeholders, we assessed this situation as quickly as we believed we could responsibly do and converged on the decision to sunset the company."
Shall the development of a redundant product be continued?
Founded in 2018, the company was working on a decentralized ecosystem and worked on multiple products over the last few years.
The project also raised an undisclosed amount in a seed round in the same year of its launch and is backed by well-known venture capitals including Polychain Capital, Dragonfly Capital, and Chapter One Ventures.
The company initiated its development with a Liquidity aggregation protocol for decentralized exchanges (DEX) - Kosu - which the team found to be obsolete after a year due to the changing market structure of DEX.
Though the developers took a new project called Zaidan, a request-for-quotation system built on the DEX project 0x, the resources of the company were focused on Kosu.
"Many of our early efforts and investment on the Kosu project were made obsolete by broader developments in DEX market structure. The idea for Zaidan, our non-custodial RFQ system, came to us late in the company's life cycle at which point we were under-resourced to fully develop Zaidan," the official announcement added.
Despite Zaidan having been promising, its development process turned out to be too costly, forcing the startup to shut it abruptly.
"It is important to note that this decision will affect the broader 0x staking ecosystem as Zaidan's War Chest (ZRX staking pool #6) will no longer collect protocol fees beyond March 16th, the end of staking epoch 12," Kovatch added. "Stakers of this pool should reallocate staked ZRX onto other active pools."
