In a stunning development for the crypto industry, Layer-1 blockchain Kadena has announced the immediate cessation of operations for its core foundation and operating entity. The news triggered a catastrophic market reaction, with the native KDA token plummeting approximately 60% within two hours of the announcement.
⚡️ LATEST: Kadena announces it's shutting down operations immediately due to market conditions. $KDA plummeted 60% in 90 minutes following the announcement. pic.twitter.com/pymnal8fIS
— Cointelegraph (@Cointelegraph) October 22, 2025
Despite the shutdown, the Kadena team clarified that the proof-of-work blockchain will continue to operate. The network, known for its multi-chain “Chainweb” architecture, is now solely in the hands of independent miners and the developers of protocols already deployed on it. While the infrastructure remains online, the shockwave from the decision has profoundly impacted users, partners, and market confidence.
The Announcement: Core Team Steps Away
Kadena’s announcement was unequivocal: the foundation is halting all operations and will no longer provide active network maintenance. The decision was attributed to “unfavorable market conditions” and the absence of a “viable short-term trajectory.” The team emphasized that the Kadena network itself is a public entity and does not belong to the organization, asserting it can continue without a central team.
In practice, this means miners will continue to secure Chainweb, and application teams will retain control over their smart contracts. While the decentralized infrastructure is designed to withstand the departure of a single actor, the move complicates future coordination. Critical technical decisions and upgrades that once had central leadership will now need to emerge organically from the community.
The Breaking Point: A Business Model Under Pressure
The shutdown culminates months of mounting pressure. A harsh macroeconomic environment has reduced investor appetite for alternative Layer-1 blockchains, tightening innovation budgets and concentrating trading volume on a few dominant networks. For Kadena, maintaining an ambitious roadmap, covering R&D, talent, security, and partnerships, proved too costly. Ultimately, its treasury was no longer sufficient.
Kadena’s unique value proposition was its scalable, multi-chain Proof-of-Work design. However, despite its technical promise, application traction failed to generate a self-sustaining network effect. Facing intense competition and without a clear commercial horizon, the core team concluded that continuing operations was no longer defensible.
What’s Next? Three Potential Scenarios
The future of the Kadena ecosystem is now uncertain, with three primary scenarios emerging:
Minimal Continuity: Miners keep the chain secure, but the ecosystem slowly contracts. Active projects handle maintenance at a reduced pace, sustained as long as mining rewards and fees cover costs.
Community Revival: Community members form a new, lightweight foundation or DAO to coordinate urgent updates, such as node client patches and security fixes. This path requires time and shared legitimacy but could restore confidence.
Network Fork: A faction of actors proposes a major upgrade or fork to simplify the architecture and attract new developers—a risky move that requires strong consensus on vision and tokenomics.
For users and investors, the immediate priority is to monitor the status of their DeFi applications, wallets, and bridges on the network. The coming days will be critical in determining whether Kadena can survive as a truly decentralized network or if its ecosystem will fundamentally reconfigure.
