The decentralized autonomous organization (DAO) behind Ethereum’s Layer 2 network, Scroll, said it will propose a plan to dissolve its Security Council and transfer control of the network to an account managed by an internal team.
The announcement of the proposal comes two months after Scroll’s main fee-generating decentralized application (dapp), crypto neobank Ether.fi, moved to Optimism’s OP mainnet. That sent approximately 300,000 user accounts and more than $160 million in total locked value away from the network.
In a governance update, a senior Scroll contributor said the Security Council was simply too expensive. Scroll is laying off several contributors within the DAO and reducing the capacity of its operating committees. The transfer is scheduled for the next 10 days, pending the support of the current council.
“After evaluating the cost of the Security Council in relation to its actual use over the past few quarters, we believe that continuation is no longer justified,” the post reads.
The project said that all contract changes would be executed transparently and would remain verifiable on-chain.
Adding to the network turbulence, a recent increase in Scroll’s network fees appeared to have been artificially manufactured rather than a sign of organic demand.
Over six days in early April, the network increased the amount it charges to publish data to the Ethereum mainnet by a factor of 1,280, creating the illusion of a massive increase in 30-day on-chain fee momentum, according to an analysis by L2BEAT.
The adjustment forced users to pay more than $50,000 in excess transaction fees for publishing data that would normally have cost approximately $280. The extreme and temporary price revision was reversed on April 9.
The Ether.fi migration moved around $13 million in annualized fees away from Scroll, according to data from DeFiLlama, and cut the network’s TVL to around $23 million.
