Like any ecosystem, the cryptocurrency sector faces fierce competition, which leads to a selection of its strongest projects. This reality has just hit the Kadena blockchain hard, following the announcement that the company responsible for its development is ceasing operations. The KDA token has plummeted by more than 60%.
The Kadena organization is closing its doors
On paper—and at launch—all crypto projects aim to revolutionize the sector with innovative approaches and proposals. However, this momentum must be met with an enthusiastic and sustainable community, or else the project risks ending up in the current situation of the Kadena blockchain.
It must be admitted that its proposal seemed surprising from the outset, with the implementation of a Proof of Work (PoW) model at a time when the cryptocurrency ecosystem is turning to less energy-intensive solutions, such as Proof of Stake (PoS).
After a single peak above $10 million in August 2022, Kadena blockchain will see its total value locked (TVL) gradually plummet to levels below $1 million. It will be a slow death for this enterprise-focused project, which had clear ambitions in key areas such as real-world asset (RWA) tokenization and the stablecoin market.
But this downward spiral has clearly come to an end, following the recent announcement—effective immediately—of the cessation of activities by the organization in charge of its development, including the commercial aspect and maintenance of the blockchain.
We regret to announce that the Kadena organization is no longer able to continue its commercial activities and will immediately cease all activities and active maintenance of the Kadena blockchain.
Kadena
The KDA token plummets by more than 60%
In fact, the cessation of activities announced by the Kadena organization does not directly affect the blockchain of the same name, since it “is not owned or directly operated by the company.” Operational continuity will therefore be ensured by “an executable file (binary) guaranteeing the uninterrupted operation of the network without [its] involvement.” .”
As a smart contract blockchain operating on a fully decentralized proof-of-work model, the network is operated by independent miners, while smart contracts and on-chain protocols are managed autonomously by their respective managers.
Kadena
This announcement clearly did not reassure holders of its native token, with the price of KDA falling dramatically by more than 60% over the last 24 hours. However, this native cryptocurrency will continue to be distributed in the form of mining rewards until 2139, with a total amount set at 566 million units.
The Kadena organization also proposes to “work with [its] community to facilitate the transition to community governance and maintenance.” However, it will still be necessary to find people who are genuinely interested in taking the helm of this drifting ship.
