In light of the current market conditions, the social token platform Rally announced that it would discontinue its use of the Ethereum sidechain on Tuesday, January 31. This information was communicated to the community at large by Rally in an email.
Rally continued by saying it is "too difficult to fight in the present climate." In addition, the social NFT company warned its users, creators, and the community of token-holding followers, informing them that their crypto assets may become stranded soon.
The social network said (1) that because NFTs stored on the Rally sidechain cannot be transferred to another address, users won't be able to access them after the website is taken offline. Rally offered the following explanation for this turn of events:
"As the most of you are already aware, the year 2022 was a challenging one not just for the network but also for the entirety of the crypto currency sector. The team has put forth a lot of effort to find a way ahead, but the obstacles and the macro headwinds are just too challenging to overcome in the present context.
Rally.io was a platform built on Ethereum that allowed developers to distribute their social tokens. It made it possible for musical groups, social media celebrities, and esports teams to interact with and make money from their communities.
Rally was able to secure a total of $57 million in funding from various investors throughout the bull run of 2021. The Rally platform welcomed several of the industry's most well-known and successful developers on board.
Request to Participate in Token Acquisition
Rally urged the project's developers to get their followers to participate and show their support by acquiring Rally tokens. In exchange, they would provide those who held the tokens with several benefits.
However, because customers were beginning to voice their displeasure with the scheme on Twitter, the option to take rally tokens was disabled around a month ago. Rob Collier, the CEO of Rally, recently gave an interview with Decrypt in which he stated that finance was the primary obstacle. He added:
Due to the lack of continued support, we shall begin shutting the platform down today's date. The Rally sidechain, developed in 2018, has a very high maintenance cost compared to all of the brand-new layer-1 technology stacks released not too long ago.
During August, we could not provide withdrawal services owing to a lack of cooperation from third parties. On the other hand, customers were allowed to withdraw all their assets beginning on November 1 and continuing through January 24. We made several announcements in this area to better assist Rally users.
The underlying RLY token had proceeded to fall in value ever since reaching its all-time high of $1.38 in April 2021, when it first reached its peak. Following yesterday's news, the price of RLY tokens plunged by an additional 93%.