- The team behind the Kadena chain announced a shutdown in their business operations, including support for the KDA token ecosystem.
- The group’s exit led to KDA losing over 62% in value.
Kadena (KDA) investors are panicking after the founding team behind their token has announced the shutdown of their operations. These include all business activity related to the group and their active maintenance of the Kadena Layer-1 (L1) chain.
The Kadena team broke the news on Tuesday evening, which sent its native token, KDA, plummeting by over 62% in the last 24 hours. The asset fell from a $0.2222 high to a $0.08294 low during the period.
“We regret to announce that the Kadena organization is no longer able to continue business operations and will be ceasing all business activity and active maintenance of the Kadena blockchain immediately,” Kadena posted on its official account on X.
Kadena Blames ‘Market Conditions’ for Shutdown
The Kadena organization blamed “market conditions” for its decision to close shop. However, it didn’t elaborate on the specific factor that led to the event.
“We are tremendously grateful to everybody who has participated in this journey with us,” said Kadena. “We regret that because of market conditions, we are unable to continue to promote and support the adoption of this unique decentralized offering.”
The group stated that it had already notified its staff about the closure. Nonetheless, it’s assigning a small team to handle the “period of transition and wind-down.”
Kadena also clarified that its company does not own the Kadena blockchain, as independent miners operate its decentralized Proof-of-Work (PoW) smart contract blockchain. Meanwhile, its onchain smart contracts and protocols are governed independently by maintainers. Hence, the KDA token and its protocols will still operate in its absence.
Additionally, Kadena ensured that it would release a new binary that would reinforce the chain’s uninterrupted operation without its involvement. It advised node operators to upgrade as soon as the new code rolls out.
Despite the Kadena organization’s assurances, KDA has already lost roughly $46.69 million of its market cap in the ensuing panic.
Kadena’s Failure to Gain Traction
Kadena launched its hybrid PoW chain in 2020. Amid a struggling adoption of its technology over the following years, it made a frantic attempt to rebrand to #NewKadena last year to emphasize its application’s new focus on solving “real-world problems that impact mankind” under its “Human Layer” or “Layer H” concept. It also launched its first NFT (non-fungible token) collection under the “Layer H” project.
Moreover, the organization started shifting its alignment toward the growing real-world asset (RWA) tokenization trend and decentralization through the establishment of a community advisory board (CAB) called the “Kadena Cabinet.”
The most significant launch Kadena made in its final push to gain traction was its integration with Chainweb EVM (Ethereum Virtual Machine). Kadena’s sharded PoW scalability under Chainweb should have lowered the entry barrier for builders using Solidity under EVM. The sudden shutdown of the team has halted this essential item under Kadena’s 2025 roadmap.
Becoming a Zombie Chain
Although the core team assured that the Kadena chain and KDA token can still operate without its maintenance, its cessation of active support means the network will no longer benefit from crucial security patches, roadmap execution, ecosystem grants, and business development. Furthermore, this factor greatly diminishes the chain’s competitiveness.
Overall, leaving it at the mercy of its dedicated community makes the Kadena chain alive, but its heart, the company behind it, has stopped, effectively making it one of the many zombie chains out there.
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