In a post shared with the community, DEGEN revealed increasing challenges in its ongoing efforts to migrate DEGEN L3 to a new service provider.
The prolonged standoff, which DEGEN says has delayed critical upgrades and harmed users, has highlighted unresolved tensions with the current supplier, Conduit.
Service disruptions
Since August, DEGEN has reportedly been trying to switch from Conduit after a series of operational issues that damaged user confidence.
According to DEGEN, Conduit implemented an untested upgrade without notice in May, resulting in 54 hours of chain outage. The disruption reportedly caused corruption in the chain state, leading to a total loss of $160,000 in user funds and a drastic 75% drop in daily bridge volume in the following month.
In the aftermath, DEGEN claims that Conduit refused to take responsibility for the losses or help with solutions, and refused to recover the lost money or provide substantial support.
Although Conduit initially offered six months of free service, it later demanded double the original renewal fee, an arrangement that DEGEN found was disproportionate to the harm to the community.
The DEGEN team said:
“We wanted a solution, no extra costs.”
Contractual disputes
One of DEGEN’s main obstacles in completing the migration was Conduit’s refusal to release critical merge keys, preventing the network from activating its new service provider.
DEGEN claims that Conduit withheld these keys unless a new contract was signed absolving them of responsibility, which involved three months of negotiations involving delays and setbacks.
Despite DEGEN’s willingness to move to a new bridging ecosystem that could strengthen its capabilities, Conduit’s control over these keys has left the platform unable to carry out the necessary steps to complete the implementation.
Compounding the problems, DEGEN alleged that Conduit had seized sequencer fees, claiming the funds were needed to cover the parent chain’s gas costs, despite an agreement to transfer these funds to DEGEN.
Additionally, DEGEN said Conduit deleted block explorer data essential to the chain’s transparency, necessitating a costly rebuild by DEGEN’s team.
The DEGEN community has largely rallied behind the team, with many users expressing frustration with Conduit’s position. DEGEN leaders Jacek and Colton have indicated they are willing to launch a new chain and compensate holders if Conduit continues to block the migration, although they hope to avoid such drastic measures.
While preferring to avoid legal action, the DEGEN team said it will “pursue every avenue” to protect its ecosystem if Conduit fails to comply.
They wrote:
“We believe transparency is crucial, especially when it impacts our community. We hope that Conduit will quickly complete the steps required for migration. If they refuse, we hope this serves as a warning to other devolved communities regarding their infrastructure needs.”