DEGEN L3 Migration Stalled by Conduit Disputes and Losses

DEGEN has encountered significant obstacles in its attempt to migrate DEGEN L3 to a new service provider, primarily due to deteriorating relations with Conduit. This situation has prompted DEGEN to consider drastic measures to safeguard its users.

Challenges in Migration

In a recent communication with its community, DEGEN highlighted the ongoing difficulties in its migration efforts. The prolonged standoff with Conduit has not only stalled critical upgrades but also negatively impacted users.

Service Disruptions

Since August, DEGEN has been trying to move away from Conduit due to numerous operational issues that have eroded user trust.

• In May, Conduit implemented an untested upgrade without prior notice, leading to 54 hours of downtime.
• This disruption caused significant issues, including chain state corruption and a total loss of $160,000 in user funds.
• Following the incident, daily bridge volume plummeted by 75% over the next month.
• DEGEN claims that Conduit refused to accept responsibility or assist in resolving these issues, including the restoration of lost funds.

Initially, Conduit offered six months of free service but later demanded double the original renewal fees, which DEGEN found unacceptable given the community's losses.

Disputes Over Contracts

A major obstacle in DEGEN's migration process is Conduit's refusal to release crucial rollup keys. This has hindered the activation of a new service provider.

• DEGEN alleges that Conduit withheld these keys unless a new contract absolving them of responsibility was signed, resulting in prolonged negotiations filled with delays.
• Despite DEGEN's willingness to transition to a new bridging ecosystem, Conduit's control over these keys has prevented any progress.
• Additionally, DEGEN accused Conduit of confiscating sequencer fees, which were supposed to be remitted to DEGEN, under the pretense of covering gas costs on the parent chain.
• Conduit also deleted essential block explorer data, which has forced DEGEN to undertake a costly reconstruction.

Community Support and Future Steps

The DEGEN community has largely supported the team, expressing frustration towards Conduit's actions. DEGEN leaders, Jacek and Colton, have indicated readiness to establish a new chain and compensate holders if Conduit continues to obstruct the migration, though they prefer to avoid such drastic measures.

While legal action is not the team's preferred route, they have stated they will explore all options to protect their ecosystem if Conduit does not comply with the necessary migration steps. They emphasized the importance of transparency, especially regarding community impacts, and hope for Conduit's prompt cooperation.

The DEGEN team concluded with a warning to other decentralized communities about the importance of their infrastructure needs and the potential consequences of similar situations.