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Vega Protocol, a decentralized trading blockchain, has announced plans to cease support for its alpha mainnet chain and its native token, VEGA. The decision, outlined in a blog post on August 30, is aimed at refocusing efforts on developing and promoting a new project, "Nebula."
Nebula is envisioned as a comprehensive retail decentralized exchange (DEX) incorporating committed liquidity and will operate with a new token, NEB. The transition will involve swapping {Vega protocol} (VEGA) tokens for NEB tokens. According to the official Vega Governance proposal, several actions will be taken, including suspending trading, redistributing the on-chain treasury to stakers, and offering guaranteed USDT incentives to validators to ensure network operations over the next two months. This period will allow users to withdraw their funds from the Vega DEX. The proposal is designed to preserve the functionality of the Vega Protocol in the long term.
The proposal has garnered significant support, with 1.7 million tokens voting in favor and only 200 tokens opposing, meeting the 2.5% participation threshold required for approval. Voting will conclude on September 6. Despite the support, the proposal has faced criticism. Commentator Spreek, on September 3, claimed that the introduction of the NEB token could lead to a dilution of existing VEGA token holders’ allocations by up to five times.
In response to the announcement, the VEGA token's value has dropped substantially. The token's price fell over 17% in the 24 hours following the news and has decreased by over 64% in the past month. The VEGA token has also seen a dramatic 95% decline over the past year.
Launched in 2018, Vega Protocol aimed to facilitate high-volume derivatives trading with an emphasis on scalability and rapid settlement times. The project raised significant capital through seed and community funding rounds in 2019 and 2021, respectively. Currently, Vega holds $424,000 in total value locked (TVL), compared to rivals such as Hyperliquid and dYdX, which have TVLs of $541 million and $395 million, respectively, according to DeFiLlama data.
