Kadena Shifts to Community Governance, KDA Plummets 59% Amidst Operational Halt

Key Points

• Kadena announced the cessation of all business operations and a transition to community governance and maintenance.
• The announcement led to a sharp drop in the value of the KDA token.

Kadena, an L1 blockchain, has disclosed that it can no longer sustain its business operations and will stop all activity and active maintenance of the blockchain. This is a move towards community governance and maintenance.

The blockchain combines the PoW mechanism from Bitcoin with DAG principles to provide a scalable version of Bitcoin. Post this announcement, the KDA token saw a significant drop.

Reasons for Shutdown

The project revealed through an official note that due to unfavorable market conditions, it’s unable to continue and promote and support the adoption of its decentralized offering.

The team has informed the staff about the operations shutdown, and a small group will be retained to manage this period of transition.

It was also stated that the Kadena blockchain is neither owned nor operated by the company. Independent miners operate the network, and onchain smart contracts and protocols are independently governed by their maintainers.

Future Steps

The Kadena team outlined the following steps for operational continuity:

• They will provide a new binary that ensures uninterrupted operation without Kadena’s involvement.
• All node operators are encouraged to upgrade as soon as possible.
• The KDA token and protocol will continue despite the team’s absence.

In its latest tokenomics update from August 2023, the project revealed that more than 566 million KDA will be distributed as mining rewards until 2139. The platform emission has more than 83.7 million KDA to be unlocked until November 2029. Further updates about the transition to community governance and maintenance will be provided in the future.

KDA’s Market Performance

Following the announcement, the project’s token KDA saw a steep decline. Trading at $0.2 on October 21, its price fell to $0.08 levels on October 22 after the project’s notes.

At the time of writing this article, KDA is trading above $0.08 with a market cap of over $28.8 million, down by 59% in the past 24 hours.