The company behind the Kadena layer-1 project has announced it is suspending all business operations immediately, citing difficult market conditions. The decision concludes a multi-year effort to advance Proof-of-Work (PoW) scalability. Following the news, the project’s native token, KDA, plummeted by approximately 60% in a matter of hours, falling from a daily high of $0.2209 to $0.088.

Decentralized Network to Remain Operational

While the corporate entity is shutting down, the Kadena blockchain itself isn’t disappearing. The development team stressed that they had built a truly decentralized network operated by independent miners and community developers. To ensure a smooth transition, the project will issue a final software upgrade that allows the platform to function without any direct involvement from the original team. A small internal staff will remain temporarily to manage communications and facilitate the handover.

The company clarified that the blockchain is not owned or operated by a central entity. Instead, its network is maintained by independent miners, while smart contracts and on-chain protocols are governed by their respective maintainers.

Long-Term Outlook for the KDA Token

Despite the shutdown, Kadena’s token economics are designed to support the network long after the founding company’s exit. Over 566 million KDA tokens are allocated for mining rewards, with a distribution schedule projected to last until 2139. Additionally, another 83.7 million tokens are scheduled for periodic release until November 2029.

This economic structure provides a robust foundation for miners and users to keep the ecosystem functional, provided the community sees value in its continuation. The team has encouraged the community to take an active role in shaping the project’s future maintenance and governance, potentially marking a shift toward a model run by collective effort rather than corporate oversight.

Market Reaction and Price Outlook

The KDA token showed significant negative sentiment on the daily charts after its sharp decline. The token’s trading volume surged by over 1,200%, indicating a spike in activity as investors likely exited their positions amid the uncertainty. Given the current broader market indecision, the KDA price may see further declines before finding stable support.

Kadena’s closure highlights the harsh financial realities many blockchain startups face. Despite developing innovative technology, many have struggled to navigate the pressure of bearish market cycles and waning investor interest. The project’s future performance will now depend entirely on its community’s ability to carry it forward.