The native token of the Kadena layer 1 blockchain saw a drastic drop of 60% in just 90 minutes on Tuesday after its founding team announced the winding down of operations and stopping all network maintenance due to “market conditions.”
In a post on X, Kadena stated it “can no longer continue business operations and will halt all business activities and active maintenance of the Kadena blockchain immediately.”
“We are incredibly thankful to everyone who has joined us on this journey. We regret that due to market conditions we cannot keep promoting and supporting the adoption of this unique decentralized offering,” it mentioned.
The layer 1, branded as the “blockchain for business,” was established in 2016 by Stuart Popejoy and Will Martino.
Popejoy was previously the head of JPMorgan’s former Blockchain Center of Excellence, while Martino, the former CEO of Kadena, had served as a tech lead for the Securities and Exchange Commission’s cryptocurrency steering committee before dedicating his efforts to Kadena full-time.
This shutdown highlights the difficulties smaller blockchains face in establishing a sustainable user base and achieving profitability in the midst of fierce competition from larger networks like Ethereum and Solana.
The Kadena (KDA) token had once approached a $4 billion valuation in November 2021, but currently, its value stands at $30.9 million, according to data from CoinGecko shows.
Kadena and KDA will remain operational
Kadena mentioned it will keep a small team for the wind-down process; however, independent validators will still be able to process transactions and mine blocks on Kadena’s proof-of-work blockchain, it clarified.
“The Kadena blockchain is not owned or operated by the company. As a fully decentralized proof-of-work smart-contract blockchain, the network is maintained by independent miners, while on-chain smart contracts and protocols are governed autonomously by their maintainers,” it elaborated.
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Kadena stated it will soon “release a new binary that ensures uninterrupted operation without our involvement, and will urge all node operators to upgrade at the earliest opportunity.”
Kadena still needs to address unlocked KDA tokens
The KDA token will persist, and the Kadena team noted it will engage with the community regarding the distribution of the 83.7 million KDA tokens set to be released in November 2029.
An additional 566 million KDA tokens are slated for distribution as mining rewards until 2139, according to Kadena.
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