What is known at the moment:
- VEGA token fell by more than 99%;
- The project raised more than $48 million on CoinList + $11 million from tier-2 VC;
- Vega Protocol released many updates, but failed to attract users and developers;
- The team announced a new project Nebula with its DEX and offers to exchange VEGA for a new token NEB;
- The project closed comments under the announcement of the protocol change;
About the Vega Protocol project
Vega Protocol is a decentralized protocol designed to simplify the creation and management of derivatives markets without intermediaries.
The main goal of the project is to provide traders with tools for creating and managing decentralized markets, with an emphasis on network security and sustainability.
The project raised over $48 million during the sale on CoinList in 2021, which was one of the largest ICOs of that time (token prices at the sale: $5, $10 and $15).
There was a lot of excitement, many did not get to the sale. On OTC allocations were sold at 1.5-2 times the sale price. Many sale participants went into the red after the unlock, except for the participants of the 3rd option sale ($15 for VEGA), since their tokens were already unlocked on TGE at a price of 15-21.
Among the investors in two rounds (Strategic ($0.77) and Seed ($0.36)) were such well-known funds as Pantera Capital, Coinbase Ventures and Arrington XRP Capital. $5.5 million was raised in two rounds.
The project team consists of ~32 people (according to LinkedIn) and two founders:
Barney Mannerings - IT specialist from England, has experience working with exchanges and trading platforms.
Ramsey Khoury - A designer by education, he also works on the Chainspace project (engaged in the creation of a decentralized system of smart contracts for making payments and other operations in the blockchain).
What were the updates
During its existence, Vega Protocol has released many updates aimed at improving the functionality and security of the protocol. Among the key ones are integration with UMA and Pyth oracles, improvement of the reward system for liquidity providers, as well as expansion of opportunities for cross-chain deposits using Axelar and Squid.
Point Trading
In March 2024, Vega announced that it was creating a point futures market, but it never gained popularity and there is no volume.
Prediction Market
One of the latest announcements was the launch of a new product within the ecosystem - a prediction market similar to Polymarket, but based on the Cosmos ecosystem. This feature will be integrated directly into the DEX, which should provide a new level of interaction and attract more users (the token has grown by 26% since the announcement).
However, despite all the team's efforts, the project has not been able to achieve significant adoption from users.
Scam or Strategy Revision?
According to the team's statement yesterday, the main reason for the project's current difficulties was the inconsistency of the Vega concept with modern market requirements.
The protocol failed to attract a sufficient number of developers and MMs, which resulted in low trading volumes and insufficient ecosystem development. The main focus of users shifted to crypto-native and retail use cases, which require a different strategy and approach.
Nebula Project: A New Stage of Development?
As part of the Vega Protocol strategy revision, the team announced the launch of a new project - Nebula. This blockchain is aimed at creating a DEX based on the Vega Protocol, with its own NEB token.
NEB Tokenomics
Total supply - 10 billion. 20% allocated for conversion to VEGA holders. Conversion rate (30 NEB : 1 VEGA)
NEB contract address - https://etherscan.io/token/0x6e9e554bbca46cd86684f85f4037360bda382069
Nebula is expected to launch in late September. There is no information on the team.
However, it is worth noting that in the official Twitter account of Vega Protocol, comments under the announcement were closed due to the negative reaction of the community.
Possible delisting from exchanges
Trading volumes on the ByBit exchange before the announcement amounted to only about $9 thousand in 24 hours. At the same time, ByBit itself sends a warning about the possible imminent delisting of the token.
Is there any money left?
The team cannot provide any information on the current fund balance, the information is "Confidential".
But apparently there is not much money left, the admin in the discord reported that the new update will reduce the project costs and simplify the development.
Conclusion
Despite many plans, Vega Protocol faced serious problems that put its further existence in its original form at risk.
The Nebula project is an attempt by the team to breathe new life into the development of Vega, the success of this project will depend on the support of the community, but as we can see, the community did not like this solution to the problem.
Voting on the new update should start today, the time is unknown.
Even having an experienced team, funds, and a large amount of collected funds does not guarantee the success of a project.
Based on this example, we can highlight indicators for projects to determine whether it will develop successfully:
- Product complexity: If the product is too complex for mass use or requires significant technical knowledge, this can significantly limit its adoption;
- Ecosystem: The lack of an active ecosystem of developers and users is one of the main factors limiting the growth of a project;
- Ability to adapt to market conditions and trends;
- Marketing;
- Communication with the community: The ability to communicate with the community even in difficult situations gives an understanding that the project is really trying to solve the problem. But when the project closes comments, this is a serious red flag.
