KDA token tumbles as Kadena Foundation halts operations, network to be maintained by miners.
Kadena’s blockchain manages to stay live as the community and miners take over day-to-day operations
Photo Credit: Unsplash/Adam Śmigielski
The Kadena Foundation, the team behind the Layer 1 blockchain, which was once positioned as a scalable proof-of-work alternative to Ethereum, has abruptly announced it will cease all business operations due to “market conditions” and an inability to sustain development. The news caused Kadena's native token, KDA, to crash, losing more than 55 percent in a single day. As per CoinGecko, KDA is currently trading at $0.09 (about Rs. 7.5) with a market capitalisation of $26.6 million (roughly Rs. 2.2 crore), down from its peak valuation of $25 billion (roughly Rs. 2,07,500 crore) in 2021, when it was trading close to $25 (roughly Rs. 2,075).
The blockchain will continue to function even after the foundation is shut down, as independent miners and community developers will continue to process transactions and maintain the network. The Kadena team has retained a small group to oversee the transition period and release a new node binary that enables uninterrupted operations without the foundation's involvement. Over 566 million KDA tokens remain allocated as mining rewards until 2139, while 83.7 million tokens are still scheduled to unlock by November 2029.
“We regret to announce that the Kadena organisation is no longer able to continue business operations and will be ceasing all business activity and active maintenance of the Kadena blockchain immediately,” the team said in a statement posted to X.
The post further explained that the Kadena blockchain is not owned or operated by the company and is maintained independently by miners. The network can continue to operate without the core team because on-chain smart contracts and protocols are managed by their respective maintainers. A new node binary will be released to ensure uninterrupted operation, and all node operators are encouraged to upgrade promptly.
Founded in 2016 by former JPMorgan blockchain engineers Stuart Popejoy and Will Martino, Kadena launched in 2019 with a multichain “braided” architecture that combined proof-of-work mining with smart contract functionality and its own programming language called Pact.
Before dedicating himself full-time to Kadena, Martino served on the Securities and Exchange Commission's cryptocurrency steering committee, and Popejoy oversaw JPMorgan's Blockchain Centre of Excellence.
This closure highlights the challenges smaller blockchains face in building sustainable user bases amidst competition from Ethereum and Solana. Once an attractive alternative to Ethereum's expensive networks, Kadena found it difficult to keep developers involved and funding as modular and proof-of-stake blockchains gained popularity, putting its future primarily in the hands of community projects and independent miners.
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