Stablecoin Staking Boom Prompts Hourglass to Halt Operations, Emphasizing Safety Above Rapid Growth

Hourglass, a platform specializing in stablecoin staking, has temporarily halted new deposits for its Phase 2 event after participation levels far exceeded projections. On November 6, blockchain data indicated that deposits for this phase had surpassed $650 million, well above the original $500 million limit, as reported by a

. This suspension is intended to protect user assets and maintain platform stability while operational changes are being implemented.

Hourglass enables participants to deposit stablecoins into the protocol and earn incentives linked to its native Stable token. The platform has clarified that only deposits made through approved channels are eligible; those sent directly via Etherscan or through automated smart contracts do not qualify. Such ineligible deposits can be withdrawn using the `redeemNonKYC` function on Etherscan, as per the official statement. This approach highlights Hourglass’s commitment to regulatory compliance and effective risk management amid increasing oversight of stablecoin operations.

LookOnChain noted that the minimum deposit for Phase 2 is $100,000, and the deposit period has been extended by at least an hour to accommodate the surge in interest. This extension demonstrates the strong demand from both institutional and individual investors. Market observers believe the robust participation in Phase 2 reflects growing trust in Hourglass’s token model and its capacity to deliver returns even in a low-yield environment.

Hourglass’s move to suspend new deposits is consistent with a wider industry shift toward prioritizing safety and openness in the stablecoin sector. The decision comes as regulators increase scrutiny of stablecoins, especially after the downfall of Terra’s UST in 2022. By restricting eligible deposit methods and stressing the importance of KYC (Know Your Customer) procedures, Hourglass seeks to reduce risks tied to unlawful activities and market instability.

The crypto community has responded with mixed opinions to these measures. Some investors have welcomed the platform’s transparency and focus on user protection, while others are concerned about possible delays in receiving rewards. Although Hourglass has not specified when deposits will resume, it has assured users that all funds are safe and fully supported by reserves, according to the report.

This forms a key part of Hourglass’s broader plan to grow its ecosystem and strengthen its role in the stablecoin staking arena. With deposits exceeding $650 million, the platform is set to allocate a substantial share of its token supply, which could boost liquidity and user adoption. Nonetheless, the pause also underscores the complexities of expanding DeFi platforms while adhering to regulatory standards.