Author: Deep Tide TechFlow

The leading DeFi parachain on Polkadot, the Acala team, has submitted a governance referendum on-chain Acala Referendum #195, proposing to shut down the network. The sister chain Karura also initiated Karura Referendum #137. If the vote passes, both chains will stop block production on February 10, 2027.

In a letter to the community, the team stated clearly that the Polkadot parachain architecture has caused ecological funds to be deeply fragmented, significantly lacking in decentralized financial liquidity, and that the costs of maintaining nodes and networks have continually exceeded actual revenues. After seven years of construction and operation, the flagship ecological network is actively withdrawing, directly scrutinizing the sustainability of applications under the vision of multi-chain connectivity.

Segmented Withdrawal Deadline Set to Avoid Security Risks

The chain stop plan sets a clear cross-chain withdrawal deadline for external assets. Holders must withdraw DOT, KSM, and USDT, USDC obtained through cross-chain bridging to other networks before February 10, 2027. The native assets ACA and KAR cannot be exported across chains and will remain permanently on their respective network ledgers after the chain stop.

Liquid staking products will implement a segmented unbinding deadline. Regular unbinding on Polkadot takes 28 days, while LDOT bound to specific validators requires an additional 28 days to unlock, which must be requested before December 16, 2026; the unbinding deadlines for ordinary LDOT and LKSM are January 12, 2027, and February 2, 2027, respectively.

Setting an early withdrawal window is based on clear technical security defense considerations. After the chain stop, the network code and historical state ledger will be in the public domain, and any third party can recompile and start it. With the proliferation of AI-assisted code auditing tools, legacy systems lacking continuous maintenance can easily expose governance vulnerabilities, and clearing retained assets early can block potential hackers from stealing funds that are stuck.

Most of the First Auction Winners Have Stopped, Confirming the Fragmentation of Liquidity

Looking back at the first round of Polkadot parachain auctions in November 2021, Acala secured the first slot in the whole network, attracting over 81,000 on-chain addresses to participate in mutual lending, locking up over 32.5 million DOT. The long rental period of 96 weeks exchanged for shared security of the relay chain has also resulted in a massive amount of funds being long-term locked, constraining the turnover efficiency of ecological capital.

Five years later, most of the first batch of winning projects have either left the market or stagnated. Moonbeam stopped block production around July 31, 2026, and migrated GLMR to Base; Parallel Finance closed its products after experiencing a security incident; Clover has also separated from its original parachain identity, with only Astar maintaining active maintenance and upgrades.

The multi-chain structure and the interaction with independent cross-chain wallets have intensified the experience fragmentation, continuously diluting the scarce on-chain liquidity. Although Polkadot has currently shifted to the Agile Coretime technical document outlining the elastic core time model, and promoted the JAM protocol white paper for parallel computing upgrades, early outflowing ecological funds are unlikely to return in the short term.

Signal Voting Promotes and Waits for Layer Execution Transactions to Land

Currently, the shutdown plan is in the signal voting stage. On-chain data from Subsquare shows that Acala Referendum #195 has received approximately 23.1 million ACA in favor votes, while Karura Referendum #137 has received approximately 1.28 million KAR in favor votes, with opposition votes standing at zero for both.

Once the signal voting passes, the team will also initiate on-chain execution proposals to implement the shutdown operation. The official promises to maintain node operation and core core time availability before the chain stop; overdue external assets that are not withdrawn will be returned to the corresponding Asset Hub address to the best of their ability but without full guarantees, and external assets from the treasury are planned to be donated to the corresponding relay chain treasury.