In a recent strategic decision, the Vega protocol has decided to stop functioning its L1 blockchain and the VEGA token. The community members unanimously voted in favour of this decision in a meeting held on September 12.
The protocol announced the initial proposal for dissolution on August 30. It allowed a ramp-down period till September 13 during which validators were incentivized to continue the node operations to facilitate easy withdrawal of their funds from the network. The protocol also urged the stakers to hold their stake till September 13 and vote for the new proposal.
This decision is made in the light of revamping the platform to make good use of the original vision of the protocol and build a new chain for the team’s next project in support of a new chain and token.
According to Barney Mannerings, the co-founder of the Vega Protocol, the decision to shut down the blockchain and the tokens was due to the realization that the Vega Protocol in its current form would not be sustainable for the long term.
The Reason for Vega L1 Blockchain Shutdown
The Vega protocol supports the creation and trade of derivatives on a fully decentralized network. The alpha mainnet of the Vega platform was released in 2023.
However, even after a year of its launch, the protocol has not gained enough traction to maintain long-term sustainability in its current form.
As a result, the protocol has decided to maintain the core software and develop it further instead of continuing with the blockchain and token in their present state. These resources will be routed to develop further innovations in the protocol.
New initiatives
The Vega protocol is planning to launch a new decentralized exchange called Nebula. Nebula is devised to be an independent network with native tokens called NEB. As a part of affecting continuity among the users, the NEB tokens will be distributed to the VEGA token holders.
Validators to Maintain Vega Alive and Running Until October 27
The Vega protocol has asked the validators to keep the network alive till October 27 so that the investors get ample time to withdraw their tokens and safely move them to other investments.
The team has also urged the investors to stay tuned to the website for getting the latest updates. They have warned that if the assets are not moved before the chain halts, they will get stuck inside the blockchain and will become irretrievable. So the investors must withdraw their investments as soon as possible.
Current Status of the VEGA Tokens in the Market
The recent announcement of the dissolution of the Vega protocol and the VEGA tokens has affected its status in the market. The price of the tokens suffered a steady decline in the last week with its price falling from $0.10 to $0.068.
This is a steady 30% decline in the price. The price decline has been over 90% compared to the price of the VEGA tokens at the beginning of this year.
Key Features of the Vega Protocol
The key features of the Vega protocol that is used to build the Nebula protocol are discussed here.
- The protocol is non-custodial and pseudonymous. All interactions of the protocol are done through a public key and are encrypted using cryptography so that there are no backdoors or admin keys
- The software is open-source.
- Vega is a CometBFT-based proof-of-stake chain built especially for trading.
- The data nodes provide an order book and historic data APIs like a centralized exchange.
- The fees levied by the protocol are optimized in such a way that per-transaction “gas” costs for orders.
- The whole market is created permissionless. It has a built-in governance mechanism that helps users create their marketplaces and manage them.
Also, Read: Buy Wall And Sell Wall In Crypto: What Is It? How To Identify them?
The Bo ttom Line
Even though the Vega protocol’s decision to dissolve its L1 blockchain and the VEGA tokens has come as a surprise and shock to the investors.
However, it is promising to note that the new blockchain, Nebula, will take over the market with improved design and use cases.
