According to Foresight News, Degen officially stated that there is a dispute with Conduit. If Conduit decides not to do the right thing, DEGEN is ready to create a new chain and pay all holders and developers on the original L3. It pointed out that DEGEN L3 handles more than $200,000 in bridge transactions per day. Conduit pushed a bad upgrade without notice, resulting in 54 hours of downtime and a loss of $160,000 in user funds. Subsequently, bridge transaction volume fell by more than 75% in the following month.
After the incident, Conduit refused to take responsibility for the community's losses, rejected the Degen chain upgrade request and withheld the sequencer fee, while requiring a new contract to be signed to avoid liability. Because Conduit holds Degen's aggregate key and refuses to upgrade the Degen chain, it cannot sign the necessary transactions to complete the deployment of smart contracts or activate the sequencer of the new infrastructure provider.