Vega Protocol, a platform focused on crypto derivatives trading, has put forward a proposal to discontinue its blockchain operations and to withdraw support for its native token, VEGA. In a recent announcement, the team behind Vega expressed intentions to shift their focus toward enhancing the protocol’s software and introducing a new initiative dubbed “Nebula.”
Nebula is envisioned as a decentralized exchange (DEX) aimed at retail users, complete with reliable liquidity, and will operate on the Vega protocol. Participants holding VEGA tokens are presented with an option to exchange them for the forthcoming NEB token, designed to facilitate trading within the new DEX.
The governance proposal details the steps to be taken, which include halting trading activities, redistributing the on-chain treasury to stakers, and offering assured incentives in USDT to validators to maintain network operations over the upcoming two months. This transitional period is intended to ensure users can withdraw their funds from the existing Vega DEX. Eventually, the decision to continue running nodes would rest with current or future validators, though the absence of trading and token rewards is expected to lead to a halt in the alpha mainnet chain’s activities.
At present, the proposal appears to have garnered substantial backing, with approximately 1.7 million tokens supporting the initiative against a mere 200 tokens opposing it. With a voting threshold of merely 2.5% for governance changes to pass, the voting period is set to close on September 6.
The announcement, however, has not been free of scrutiny. Critics within the crypto community have raised concerns regarding the potential dilution of existing token holders’ equity with the introduction of the NEB token. Following the news, the price of VEGA has seen a significant downturn, dropping over 17% in a single day and marking a staggering 95% decline over the past year. Despite earlier achievements, including $5 million raised in 2019 and an additional $43 million in 2021, Vega’s current total value locked in the protocol stands at a mere $424,000, a stark contrast to its competitors in the decentralized trading space.
