By: Deep Tide TechFlow
The Acala team, behind Polkadot’s leading DeFi parachain, has submitted Acala Referendum #195 on-chain, proposing to shut down the network. Its sister chain, Karura, has simultaneously opened Karura Referendum #137. If the votes pass, both chains will stop producing blocks on February 10, 2027.
In a letter to the community, the team stated clearly that Polkadot’s multi-parachain architecture has led to ecosystem funding being spread too thin, leaving decentralized finance liquidity severely inadequate. The costs of maintaining nodes and the network have also consistently exceeded the returns. The flagship ecosystem network, built and operated for seven years, is voluntarily stepping aside—a development that puts the sustainability of applications under the vision of a multi-chain connected future squarely under scrutiny.
Staggered withdrawal deadlines set to mitigate security risks
The shutdown plan sets clear cross-chain withdrawal deadlines for external assets. Holders must withdraw DOT, KSM, and USDT and USDC bridged in from other networks by February 10, 2027. Native assets ACA and KAR cannot be exported cross-chain and will remain permanently in their respective network ledgers after shutdown.
Liquid staking products have staggered unbonding deadlines. Polkadot’s standard unbonding period is 28 days, while LDOT bonded to specific validators requires an additional 28-day unlock period. Applications must be submitted by December 16, 2026. The unbonding deadlines for regular LDOT and LKSM are January 12, 2027, and February 2, 2027, respectively.
The early asset withdrawal window was set for clear technical security reasons. After shutdown, the network code and historical state ledger will be publicly accessible, and any third party will be able to recompile and launch them. As AI-assisted code auditing tools become more widespread, legacy systems without ongoing maintenance are highly vulnerable to governance flaws. Clearing out remaining assets early can prevent potential hackers from stealing funds left behind.
Shutdowns among most early auction winners highlight fragmented liquidity
Looking back at Polkadot’s first parachain auction in November 2021, Acala secured the network’s first-ever slot, attracting more than 81,000 on-chain addresses to its crowdloan and locking up over 32.5 million DOT. The 96-week lease secured shared security from the relay chain, but also tied up vast amounts of capital for an extended period, restricting the efficiency of capital circulation across the ecosystem.
Five years later, most of the initial winning projects have exited or stalled. Moonbeam stopped producing blocks around July 31, 2026, and migrated GLMR to Base. Parallel Finance shut down its products after a security incident. Clover also ceased to operate as a parachain, leaving Astar as the only one still actively maintained and upgraded.
The multichain structure and interactions with separate cross-chain wallets have further fragmented the user experience, while scarce on-chain liquidity continues to be diluted. Although Polkadot has now shifted to the flexible coretime model described in its Agile Coretime technical documentation and is pursuing parallel computing upgrades outlined in the JAM protocol gray paper, ecosystem capital that flowed out in the early days is unlikely to return in the short term.
Indicative votes advance as execution-layer transactions await implementation
The shutdown plans are currently at the indicative voting stage. On-chain data from Subsquare shows that Acala Referendum #195 has so far received approximately 23.1 million ACA in favor, while Karura Referendum #137 has received approximately 1.28 million KAR in favor. Neither proposal has received any votes against so far.
After the indicative votes pass, the teams will submit on-chain execution proposals to carry out the shutdowns. The teams have pledged to keep nodes running and coretime available until shutdown. External assets not withdrawn by the deadline will be returned to the corresponding Asset Hub addresses where possible, but a full refund is not guaranteed. External assets held in the treasuries are planned to be donated to the treasuries of the corresponding relay chains.