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Decentralized finance (DeFi) platform Vega has proposed shutting down its blockchain, deprecating its native token, and introducing a new token that would dilute the value of existing tokens by fivefold.
The proposal generated significant controversy within the community because it represented a dramatic change in the direction of the project.
The Vega Governance team announced the proposal with the following words: “This is a governance proposal that will implement the changes first proposed by the project team in their last blog post. This proposal is a vote to deprecate the Vega chain and for the project to no longer officially support a chain or token.”
If approved, the proposal would have far-reaching implications, including suspending trading on the platform, redistributing on-chain treasury to stakers, and providing guaranteed USDT incentives to validators to keep the network running for at least two months. This period would allow users to withdraw funds from the decentralized exchange (DEX) before the expected shutdown of the alpha mainnet chain.
Vega explained that it will be up to current or potential validators to decide whether to continue running nodes after this period. However, since there is no trading and no VEGA tokens are being given for rewards, the chain is expected to eventually become dysfunctional.
This proposal will not affect the technical functionality of the VEGA token or protocol, meaning the community could theoretically create a new chain based on VEGA. However, the Vega project team stated that it does not expect to financially or otherwise support any VEGA-powered chains in the future.
*This is not investment advice.