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Skynet Labs, the parent company of Siacoin (SC), has declared that it would cease operations due to a lack of finances in its most recent investment round.

This decision, however, will have no effect on the Skynet platform, which will continue to operate, and all user files will stay on the platform.

"Skynet will have to continue without Skynet Labs and many of the incredible people who have poured their hearts and souls into creating a brighter future for users and user data."

Skynet is a decentralized app hosting and storage platform designed to facilitate the creation of a decentralized internet.

In 2020, the firm, originally known as Nebulous, secured $3 million in investment. While it is a pioneer in decentralized storage, other initiatives with more financial clout have developed, including Filecoin, Storj, and Arweave.

Skynet Labs will continue to function over the next 12 weeks, during which time the firm will focus on providing a smooth transfer to the Skynet Community.

The business's CEO, David Vorick, stated that the company has already put off half of its staff and would lay off the remaining half over the following month.

However, it will ensure that all essential work is completed before the firm closes. The idea, he says, is to "make the transition to a post-Skynet-Labs ecosystem as seamless as possible."

He stated that if all went as planned, people would not notice the difference.

Meanwhile, the CEO blames the closure on the company's tendency to focus on many projects at once, making it impossible to develop a single product thoroughly.

Furthermore, he stated that, while having a good technology, Skynet was never adopted by the crypto sector in comparison to competitors such as Arweave (AR) and IPFS.

"We established a platform with millions of monthly active users, but those individuals were mostly outside of cryptocurrency and therefore not easily contributing to a fundraising story."

He also admitted that the team developed too quickly on the assumption that the user base would convert into additional funding.

Nonetheless, numerous Skynet Labs team members will continue to work on and assist the project. The Sia Foundation and the Skynet ecosystem will continue to function normally.