The decentralized organization (DAO) that directs the Scroll network running on Ethereum has announced its plan to dissolve the security council and transfer network control to an in-house team. This offer came up just after Scroll suffered significant losses in user and money flow. Ether.fi, Scroll’s application that produces the highest transaction volume in recent months, was moved to the Optimism mainnet with 300 thousand users. This migration shook the network in a short time, and $160 million in assets outflowed from Scroll.
Structural change in management is on the agenda
The Scroll’s governance structure has until now been community-based, overseen by the Security Council. However, the core team wants to change the management model, arguing that the council is too costly for the needs of the network. The notice sent to the community states that maintaining the current system creates an unnecessary financial burden. Within the scope of the plan, many people working at the DAO are expected to be dismissed, and the capacity of the operational committees will also be reduced.
The management transfer to the internal team will be completed within the next 10 days with the approval of the current council. It is also noted that all new steps taken on behalf of the network and changes in smart contracts will be transparently viewable on the chain.
Fee policy and users’ reactions
The sudden increase in transaction fees on the Scroll network in March and April drew attention to the project again. According to a report by independent analytics community L2BEAT, in early April, the Scroll network briefly increased its data transfer fee by 1,280 times. Thus, a picture emerged as if there had been an extraordinary increase in 30-day chain fees. However, it was emphasized that this adjustment was an artificial move and did not result from organic user demand.
Temporarily increased network fees caused users to pay a total of $50,000 in extra transaction fees. However, such transactions normally only cost about $280. The sharp price increase fell back to its previous level as of April 9.
Ether.fi continues to decline after migration
Another recent important development was the departure of Ether.fi, the decentralized finance application based on Ethereum, from Scroll. While Ether.fi moved 300 thousand accounts and a significant transaction volume to the Optimism network, it caused approximately 13 million dollars of transaction fees to leave the Scroll on an annual basis, according to DeFiLlama data. As a result, the total amount of locked assets in the Scroll decreased to 23 million dollars.
“When we compare the use and cost of the Security Council in recent quarters, we do not think it makes sense to continue,” the Scroll core team said in a statement.
Financial and community-based challenges arising from the structural changes and application migrations experienced by Scroll have raised questions about the long-term sustainability of the network. It will become clear in the coming period whether user and asset outflows will continue and how effective the management change will be.
