In a recent announcement to its community, DEGEN disclosed the challenges it is facing in migrating DEGEN L3 to a new service provider.
The ongoing standoff with its current provider, Conduit, has caused delays in crucial upgrades and has negatively impacted users, bringing to light unresolved issues between the two parties.
Service Failures
DEGEN has been trying to move away from Conduit since August due to a series of operational issues that have eroded user trust.
One significant incident occurred when Conduit implemented an untested upgrade in May without warning, resulting in 54 hours of chain downtime. This led to a loss of $160,000 in user funds and a 75% decrease in daily bridge volume over the next month due to chain state corruption.
Despite the damages, Conduit allegedly refused to take responsibility or provide adequate support, only offering six months of free service initially before doubling the renewal fees, which DEGEN considered unfair.
The DEGEN team expressed their frustration, stating, “We wanted a solution, not added costs.”
Contractual Disputes
One major hurdle in the migration process has been Conduit’s reluctance to release essential rollup keys, hindering the activation of the new service provider.
DEGEN claims that Conduit withheld these keys unless a new contract relieving them of liability was signed, leading to prolonged negotiations and delays.
Despite DEGEN’s readiness to switch to a new bridging ecosystem, Conduit’s control over the keys has prevented the platform from completing the necessary steps for deployment.
Furthermore, DEGEN accused Conduit of taking sequencer fees and deleting block explorer data, further complicating the situation and requiring additional efforts from the DEGEN team.
In response, the DEGEN community has shown support for the team, with leaders Jacek and Colton considering launching a new chain and compensating holders if Conduit continues to impede the migration.
Although they prefer to avoid legal action, the DEGEN team emphasized their commitment to protecting the ecosystem and ensuring transparency. They stated, “We will explore all options to safeguard our community if Conduit fails to cooperate.”
