Vega Protocol, which is supported by Pantera Capital, is set to shut down its layer-1 blockchain. The network will temporarily remain active to allow users to withdraw their funds before fully closing by late October.
Governance and Token Impact
The decision came after a governance vote that showed overwhelming support for ending the blockchain operations. It prioritizes software development. Trading on the network has stopped and the network is now winding down. This reportedly caused the VEGA token price to drop by 14%. The token is down to $0.0576.
The Vega team stated,
The blockchain will stay active until at least October 27. This gives users enough time to remove their assets.
This recent development ensures that users can securely manage their investments during the shutdown. A final vote is currently underway to settle the remaining trades and allocate approximately $28,000 in unused insurance funds to validators, helping to maintain network stability during the shutdown. The vote will conclude on September 13, locking in the final market prices at the last recorded trading values.
Pantera’s Backing in Vega
Vega Protocol launched its network in 2023 following the vision outlined in its 2018 whitepaper. It was designed as an application-specific blockchain specifically for decentralized trading. It uses the Tendermint proof-of-stake consensus mechanism. The project secured substantial funding that includes a $5 million seed round led by Pantera Capital in 2019 and a $43 million community token sale on CoinList in 2021.
Post its launch, Vega Protocol was featured in Top Developer Activity Stats by Santiment instantly. The list was of the top 10 crypto assets based on development activity. Blockchain intelligence firm Santiment compiled the list and included crypto projects with the highest number of developmental events in the form of GitHub commits till mid 2023.
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Important Warning for Users
The team cautions that any assets left on the blockchain after its shutdown could become irretrievable, as withdrawals from the network’s bridge require approval from two-thirds of the validators. This closure marks a significant transition for Vega Protocol as it redirects its focus toward software development.
