Mars Protocol 🔴

Martians, today we share our final update.

The wind-down of Mars Protocol, as approved in MRC-165, is now fully complete. All liquidation LTVs have been set to 0, remaining borrow positions have been liquidated, and every last bit of user funds, held in credit accounts or in Mars v1, has been safely returned directly to your wallets.

Funds held in Amber will follow in the coming days and will be communicated via @amberfi_io X channel.

This brings an orderly close to a journey that began five years ago with a bold vision: to build the most powerful, user-centric credit protocol in the Cosmos ecosystem. From the early days of pioneering leveraged strategies and credit accounts, through countless upgrades, community governance discussions, and moments of genuine innovation, Mars grew into something special, and that was entirely because of you. You lent, borrowed, ran high-leverage strategies, traded perps, debated proposals, shared feedback, and believed in what we were building together. We couldn't have asked for better Martians.

As we turn the page, the official Mars Discord and Telegram channels will be shut down in the coming days. There will be no further updates or support through those channels.

To every single one of you, users, investors, supporters, and contributors, who showed up, built with us, and made Mars what it was: thank you! From the bottom of our hearts. Your trust and energy made the ride truly unforgettable.

The Mars Protocol contributors wish you all the very best in whatever comes next. May your wallets grow, your strategies stay sharp, and your path in this space lead to brighter days ahead.

Mars Mission Control, signing off. 🔴

Martians, the proposal to wind down Mars Protocol has now moved to the on-chain governance stage.

Following the publication and forum discussion of [MRC-165] Proposal to Wind Down Mars Protocol, the formal proposal has been submitted to DAO DAO.

If approved, execution will begin on February 24, initiating the structured wind-down process:

• Gradual ~3% daily reduction of liquidation LTVs
• Progressive deleveraging across all assets
• Final LTV = 0 on March 21
• Full debt clearance and final migration
• Distribution of remaining funds to depositors

This represents the final governance step before execution.

We encourage all token holders to carefully review the proposal and participate in the decision-making process.

🗳️ Vote here:
daodao.zone/dao/neutron1px…

Forum discussion remains available here:
forum.marsprotocol.io/t/mrc-165-prop…

Thank you for your engagement, support and for being part of Mars. 🔴

Martians, today we published [MRC-165] Proposal to Wind Down Mars Protocol on the governance forum.

After evaluating the current state of the protocol, including long-term sustainability, operational overhead, governance complexity, and growth prospects, contributors believe continuing normal operations is no longer in the best interest of users. The focus now is a responsible and orderly exit.

The proposal outlines a structured wind-down from February 24 to March 21, 2026. Instead of an abrupt shutdown, liquidation LTVs across all assets would be reduced gradually (~3% per day), allowing borrowers to repay, add collateral, or close positions voluntarily. On March 21, all liquidation LTVs would be set to 0, any remaining borrow positions would be liquidated, and a final migration would be executed to fully clear debt from the system.

Once all debt is eliminated, remaining assets will be reconciled, depositors will receive their proportional remaining funds, contracts will be disabled or migrated to a final state, and Mars Protocol will cease operations.

For transparency: prior to putting forward this proposal, contributors explored whether a third party or new team would assume the Mars Protocol Foundation’s administrative responsibilities to maintain the protocol. No viable takeover materialized. Given that reality, a structured and predictable wind-down is considered the most responsible path forward.

The governance process includes a 5-day forum discussion followed by a 3-day on-chain vote. If approved, execution would begin on February 24.

We encourage all token holders and users to review the full proposal and provide feedback on the forum. We remain committed to handling this process transparently and responsibly.

Full proposal: forum.marsprotocol.io/t/mrc-165-prop…

🛰️ USDC Migration Completed – Withdrawals & Borrowing Re-Enabled

The USDC market migration and haircut have now been successfully executed.

Following this, and as approved via governance, the Neutron outpost has been restored to its pre-incident configuration:

• USDC withdrawals are re-enabled
• USDC borrowing is re-enabled
• All other markets have deposit, withdraw, and borrow functionality set back to normal
• USDC LTV has been restored to its standard level (0.90)

Perpetual markets remain disabled until further notice.

The final haircut applied during execution was 29%.
This is slightly higher than the 27.5% previously communicated and reflects interest accrual and market state changes between the initial estimate and on-chain execution. The haircut percentage was finalized at execution time to resolve the remaining bad debt in the system.

Any bad debt resulting from the haircut will be fully covered by the Mars Protocol Foundation.

A follow-up migration will be executed to remove the remaining bad-debt accounts and fully clean up protocol state. Temporary mitigation measures introduced during the incident have now been rolled back.

We understand this has been a stressful period for many users, and we appreciate the patience shown while the migration and safety steps were completed.

Further updates will be shared as they become available.