DeFi lender ZeroLend calls it quits after three years, highlighting inactive blockchains and hacks

Decentralized lending project ZeroLend is bringing its operations to a close after three years, citing unsustainable financial dynamics, weakening liquidity across supported networks and ongoing security threats.

In an announcement, the team said that falling activity on chains including Manta Network, Zircuit and X Layer made it increasingly difficult to maintain viable lending markets. The withdrawal of support from certain oracle providers — which supply real-time price data crucial for collateralized lending — further strained operations.

“Combined with the inherently thin margins and high risk profile of lending protocols, this resulted in prolonged periods where the protocol operated at a loss,” the team said.

ZeroLend functioned as a decentralized money market, enabling users to earn yield by depositing crypto assets while borrowers accessed liquidity by posting collateral. Because such systems depend on accurate external price feeds, the loss of oracle support can render markets unstable or inoperable.

The closure highlights ongoing challenges across segments of decentralized finance, where liquidity can evaporate quickly and security vulnerabilities remain a constant concern.

The team said its primary focus is ensuring users can withdraw funds safely. Most markets have been adjusted to a 0% loan-to-value ratio, effectively halting new borrowing and encouraging depositors to remove their assets as soon as possible.

For funds locked on lower-liquidity networks like Manta, Zircuit and X Layer, ZeroLend plans to implement scheduled smart contract updates aimed at unlocking as much capital as feasible.

Partial compensation for LBTC users

Users who deposited Lombard Staked Bitcoin (LBTC) into ZeroLend markets on Base — the layer-2 blockchain developed by Coinbase — will receive partial refunds following an earlier exploit.

In February last year, an attacker allegedly used forged LBTC as collateral to siphon liquidity from the platform. The team said affected depositors will be reimbursed in part using its LINEA token allocation.

ZeroLend has urged impacted users to contact moderators or submit support tickets to coordinate repayments and finalize withdrawals, signaling the end of the project’s operations.