According to Foresight News, Degen has announced a dispute with Conduit, stating that if Conduit fails to resolve the issue appropriately, Degen is prepared to establish a new chain and compensate all holders and developers on the original L3. Degen highlighted that its L3 processes over $200,000 in daily bridging transactions. However, Conduit implemented an unfavorable upgrade without prior notice, resulting in a 54-hour downtime and a loss of $160,000 in user funds. Following this incident, the bridging transaction volume plummeted by more than 75% over the subsequent month.
After the incident, Conduit refused to take responsibility for the community's losses and rejected Degen's request for a chain upgrade while withholding sequencer fees. Conduit also demanded the signing of a new contract to avoid liability. As Conduit holds Degen's aggregation keys and refuses to upgrade the Degen chain, Degen is unable to sign the necessary transactions to complete smart contract deployments or activate a new infrastructure provider's sequencer.
