The decentralized autonomous organization (DAO) behind the Ethereum layer 2 network Scroll said it will propose a plan to disband 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, was moved to Optimism’s OP mainnet. This saw around 300,000 user accounts and over $160 million in total value locked away from the network.
In a governance update, a senior Scroll contributor said the Security Council is simply too expensive. Scroll is laying off several contributors within the DAO and reducing the capacity of its operational committees. The transfer is planned for the next 10 days, pending support from the current board.
“Having assessed the cost of the Security Council against its actual use over the past few quarters, we believe that its continuation is no longer justified,” the message read.
The project said all contract changes would be executed transparently and remain verifiable on-chain.
Adding to the network turbulence, a recent increase in Scroll’s network fees appears to be artificially manufactured rather than a sign of organic demand.
In six days in early April, the network increased the amount it charges to post data to the Ethereum mainnet by 1,280 times, creating the illusion of a massive increase in 30-day on-chain fee dynamics, according to L2BEAT analysis.
This adjustment forced users to pay more than $50,000 in excess transaction fees for posting data, which normally would have cost around $280. The extreme and temporary price revision was canceled on April 9.
The Ether.fi migration removed about $13 million in annualized fees from Scroll, according to DeFiLlama data, and reduced the network’s TVL to about $23 million.
