Rare proactive abandonment! Terminal Finance cancels the launch of Converge as the chain faces difficulties.

Terminal Finance is a decentralized spot trading exchange incubated by Ethena. Due to the Converge blockchain (the ecosystem that Terminal aims to serve) failing to launch as planned, its release plan has been canceled. This announcement marks a rare case of a well-funded DeFi project proactively ending operations before its official launch, while also ensuring that all depositors can fully withdraw their principal.

Converge chain difficulties become the last straw that breaks the camel's back

The Ethereum-compatible blockchain Converge, co-developed by Ethena Labs and Securitize, was originally planned to launch in the second quarter of 2025 as a settlement layer, aiming to integrate traditional finance and Decentralized Finance (DeFi), with Ethena's USDe and USDtb stablecoins at its core. According to previous reports from The Block, Ethena and Securitize have adopted the technologies of Arbitrum and Celestia in the Converge network.

However, according to an announcement from Terminal Finance, the launch plan for Converge (originally scheduled for the second quarter of 2025) “does not appear to be starting anytime soon.” Terminal Finance stated: “We have explored various transformation options, but none of them were compelling enough. Each option presents substantial obstacles: limited support, low asset launch potential, bleak long-term prospects, and so on.”

The official account of Converge X last posted in August, stating “Global finance, unified on-chain.” Both Converge and Ethena Labs have clearly not responded to the issue of the blockchain network's delayed launch. The Block inquired with Ethena Labs about the reasons for Converge's delayed launch, but Ethena Labs did not respond immediately.

This silence itself indicates the seriousness of the problem. When a blockchain project that has been highly publicized and received ample funding suddenly falls silent, it usually means that the technical development or business model has encountered insurmountable obstacles. Converge's vision is to integrate TradFi and DeFi, a goal that is ambitious but also faces tremendous challenges. The participation of traditional financial institutions requires complex regulatory compliance, institutional-level security guarantees, and stable technological infrastructure, which cannot be fully resolved in the short term.

Possible Reasons for Converge Delayed Launch

Technical Development Bottleneck: Integrating Arbitrum and Celestia technologies may encounter unexpected technical challenges.

Regulatory Compliance Challenges: As an infrastructure connecting TradFi, it is necessary to meet stringent regulatory requirements.

Institutional collaboration progresses slowly: The decision-making process of traditional financial institutions is lengthy, and cooperation may not advance as expected.

Market Environment Changes: The volatility of the cryptocurrency market in 2025 may affect institutional participation willingness.

Resource Allocation Issues: Ethena Labs may need to focus resources on core business rather than new chain development.

Terminal Finance explores transformation but has no way out

The Terminal Finance team clearly stated when announcing their decision to abandon the launch that they explored various transformation options, but none of the options were convincing enough. This kind of honesty is quite rare in the cryptocurrency industry, where most projects, even when facing difficulties, will attempt to find alternative solutions to continue operating.

“Each solution has substantial obstacles: limited support, low asset onboarding potential, bleak long-term prospects, etc.” This statement reveals the Terminal Finance team's in-depth assessment of alternative solutions. They have clearly considered migrating to other blockchains, such as the Ethereum mainnet, Arbitrum, Optimism, or other Layer-2 solutions. However, each option has its limitations.

Limited support may refer to a lack of sufficient ecosystem partners or technical support. Terminal Finance was originally designed as a “Meta Decentralized Exchange” (MetaDEX) and adopted an innovative yield derivation mechanism. This complex design may require specific blockchain features or ecosystem support, which existing alternative chains cannot fully meet.

The low potential for asset onboarding suggests that the types of assets that Terminal Finance hopes to support are difficult to realize on other chains. The design goal of Converge is to integrate TradFi and DeFi, which means that Terminal Finance may plan to launch tokenized traditional financial assets. If migrated to other chains, the compliance and liquidity of these assets may not be guaranteed.

A long-term bleak outlook fundamentally questions the sustainability of alternatives. Even if it can barely start on other chains, if it cannot achieve its original vision in the long run, the team believes that such a compromise is not worth it.

Rare commitment of full refund of 280 million USD

(Source: DeFiLlama)

Terminal Finance emphasizes that users' funds are not affected. The team stated that all principal deposits are guaranteed 1:1 and can be withdrawn immediately. Users holding Pendle positions through Terminal Finance will continue to receive their entitled Ethena Sats rewards, associated sUSDe earnings, and EtherFi points.

According to data from DefiLlama, the Terminal Finance pre-deposit vault has reached saturation, locking up 225 million USDe, 10,000 Ether, and 100 Bitcoin, with a total value of approximately 280 million USD, distributed across more than 10,000 participating wallets. Such a scale of full refunds is extremely rare in the DeFi space, demonstrating the team's high regard for user rights.

Terminal Finance User Fund Details

225 million USDe: Ethena's stablecoin, which is a major component of the deposit.

10,000 ETH: valued at approximately 30 million USD (based on ETH at 3,000 USD)

100 BTC: valued at approximately 9 million USD (based on BTC at 90,000 USD)

Over 10,000 wallets: Indicates extremely high user engagement

Cases of active closure and full refunds are extremely rare in the history of cryptocurrency. A more common scenario is that projects continue to push through after encountering difficulties, even leading to situations where funds are misappropriated or the team runs away. Terminal Finance's approach sets a positive industry standard: when a project cannot fulfill its promises, a responsible exit is more important than forcing a continuation.

“Launching a project just for the sake of launching a project goes against our principles” reflects the team's values. In the cryptocurrency industry, which is filled with speculation and short-termism, this insistence on long-term value and project integrity is commendable.

Open source code repository leaves a legacy for the community

Terminal Finance also promises to open source its fully audited protocol codebase, which is expected to allow other developers or community projects to build upon the technology. The protocol is designed as a “Meta Decentralized Exchange” (MetaDEX) and employs an innovative mechanism aimed at addressing yield-derived impermanent loss and reinjecting profits into the bribery market.

The decision to open-source the codebase has extended the value of Terminal Finance beyond the project itself. Although Terminal Finance will not be launched as a product, its technological innovations and design concepts can be referenced and improved upon by other projects. This approach strikes a balance between the open-source spirit and practical business interests.

The innovation of the MetaDEX concept and its profit derivation mechanism is Terminal Finance's most valuable contribution. Impermanent loss has always been a major risk faced by liquidity providers in DeFi, and Terminal Finance attempts to address this issue through innovative mechanisms. Although this solution has not been implemented on Terminal Finance, the open-source code will allow other projects to test and improve this design.

Ethena ecosystem strategic adjustment signal

The Ethena Foundation announced in February that it raised $100 million through a private sale of ENA tokens to investors, including Franklin Templeton, Polychain, Pantera, Dragonfly, and Fidelity's F-Prime. These funds will be used to build its new blockchain and support institutional products.

The closure of Terminal Finance and the delay of Converge may mark a significant adjustment in Ethena's ecological strategy. Raising $100 million to establish a new chain and support institutional products demonstrates Ethena's ambition, but the actual execution has clearly faced challenges. This may prompt Ethena to reassess its resource allocation, focusing more on its core stablecoin business rather than infrastructure development.