Pantera Capital-backed Vega Protocol shuts down layer-1 chain

Vega Protocol is shutting down its blockchain and validators will temporarily maintain the network to ensure users can withdraw their funds before the full shutdown, which will occur by the end of October.

Commerce-focused blockchain Vega (VEGA) is winding down its operations following a near-unanimous on-chain governance decision, directing the project’s resources toward core software development.

The decision to retire the Vega chain, which supports decentralized trading, marks the end of the community’s support for the blockchain and its native VEGA token. In a blog post on September 12, the team behind Vega Protocol said that trading on the network has already ended and the chain is now entering a “depletion” period. Following the news, VEGA’s price fell 14% to $0.06203.

“According to information we received from validators, the Vega chain will remain operational until at least October 27 to give users ample time to withdraw their assets.”

Vega Protocol

The Vega Protocol team also added that a final vote is underway to determine the settlement prices for the suspended markets and allocate approximately $28,000 from unused insurance funds to validators to “keep the network running for the agreed-upon curtailment period.” The vote, which ends on September 13, will finalize market settlement based on the last prices recorded when trading was suspended.

The team also warned that because the protocol requires two-thirds of validators to authorize withdrawals from the network bridge, assets left on-chain after transactions stop may become irreversible.

Vega Protocol launched its network in 2023, following the vision outlined in its 2018 whitepaper. The whitepaper detailed an application-specific blockchain built on the Tendermint proof-of-stake consensus mechanism. In 2019, the team raised $5 million in a seed round led by Pantera Capital, followed by a $43 million community token sale on CoinList in 2021.