Vega Protocol, a Layer 1 blockchain specializing in derivatives trading, will cease its blockchain operations following a recent on-chain governance vote, according to a Sept.12 announcement. 

As a result, trading on the Vega network has halted, and the chain is now in a "ramp down" phase.

The vote reflects a community consensus to reallocate resources towards core software development, rather than continuing with the Vega blockchain and its native VEGA token.

Trading Ceases, VEGA Token Plummets

Trading on the Vega network has been suspended, leading to an immediate drop in the price of VEGA, which now stands at $0.06. The ongoing governance vote will finalize the prices at which suspended markets will close and establish settlement rates

The remaining insurance pool fund will be used to compensate validators and sustain network operations until late October. This will provide users adequate time to withdraw their assets. 

The final governance vote on the VEGA proposal is set to conclude at 15:00 UTC on September 13th. Users with staked VEGA tokens are advised to participate in this final vote and maintain their staked tokens until the process is complete.

The governance proposal outlines that on-chain treasury will be redistributed to stakers. Validators will receive guaranteed USDT incentives to keep the network operational for the next two months. 

After this period, it will be up to validators to decide whether to continue running nodes, as there will be no further trading or VEGA issuance.

Transition to Nebula and NEB Token

Vega Protocol will support Nebula, a DEX built with Vega's core software, as it winds down Vega blockchain, according to an Aug. 28 announcement from Vega. 

Nebula will introduce its own NEB token, offering VEGA token holders an opportunity to swap their tokens for the new NEB token. This move aims to provide some utility for VEGA holders despite the blockchain’s retirement.

Barney Mannerings, co-founder of Vega Protocol, noted that while Vega’s blockchain and token did not achieve the growth needed for long-term sustainability, the software’s legacy will continue through Nebula.

Vega first launched its white paper in 2018 and raised $5 million through seed and $43 million through community funding rounds in 2019 and 2021, respectively. Despite these efforts, the project has struggled to maintain interest and growth in its blockchain operations.