Kadena declares end of operations citing 'deterioration of market conditions'… token plunges 60%

Layer-1 blockchain project Kadena announced it will halt all business operations, citing a "deterioration of market conditions." Immediately after the news broke, Kadena's token KDA plunged 60% in about 90 minutes, causing market shock.

On the 21st (local time), the Kadena Foundation said on X (formerly Twitter), "We can no longer continue business operations and will immediately cease all activities and network maintenance." It added, "We thank everyone who has participated in the project, but due to market conditions we can no longer support the growth and adoption of this independent decentralized network."

Kadena is a blockchain project co-founded in 2016 by Stuart Popejoy and Will Martino. Popejoy was the former head of JPMorgan's Blockchain Center, and Martino previously served as the technical lead of the cryptocurrency technology committee under the U.S. Securities and Exchange Commission (SEC). The two founders launched Kadena with a vision for enterprise blockchain.

However, analysts say this closure decision highlights the reality that small- and mid-sized blockchains struggle to build a sustainable user base and revenue model while competing with large networks like Ethereum and Solana.

According to CoinGecko, KDA's market capitalization once approached $4 billion in November 2021, but has since fallen to about $30.9 million.

Kadena said this is not a complete shutdown and some personnel will remain to manage the wind-down process. It also explained that "the Kadena blockchain is a decentralized network without a central operator, and independent miners and validators will continue to produce blocks and process transactions."

The foundation plans to release new binary software soon that can operate stably without direct intervention, and will recommend upgrades to all node operators.

The KDA token will also continue, but Kadena said it will discuss with the community the distribution plan for 83.7 million KDA tokens scheduled to unlock (Unlock) in November 2029. In addition, a total of 566 million tokens will be additionally distributed as mining rewards through 2139.