Acala and Karura Propose Chain Shutdown on February 10, 2027; Most Early Polkadot Parachains Are in the Same Boat

November 11 — The Acala team has officially submitted an on-chain governance proposal Referendum #195, proposing an orderly shutdown (sunset) of the Acala network on Polkadot. Meanwhile, its sister chain Karura on Kusama has also initiated the corresponding Referendum #137. If both referenda pass, the two chains will cease block production on February 10, 2027, ending approximately seven years of operation. In an open letter to the community, the team explicitly stated that the reason is that DeFi liquidity depth in the Polkadot and Kusama ecosystems has consistently been insufficient and is further fragmented by the multi-parachain structure, with operating costs having exceeded revenue, making continued operation no longer sustainable.

According to the proposal arrangements, if the proposal passes, users must withdraw external assets themselves before February 10, 2027, including DOT, KSM, and USDT, USDC, etc. bridged in via cross-chain bridges. Liquid staking products have earlier deadlines: bonded LDOT tied to validators must begin unbonding before December 16, 2026; regular LDOT must be requested for unbonding before January 12, 2027; and LKSM must complete unbonding before February 2, 2027. Native tokens ACA and KAR cannot be withdrawn cross-chain and will remain permanently on their respective chains. The team has committed to continuing to run collators and RPC nodes and to holding valid coretime until the deadlines to ensure exit channels remain open; after the deadlines, they will make best efforts to return remaining external assets to the corresponding addresses on the Polkadot or Kusama Asset Hub, but without full guarantee, while external assets in the treasury are planned to be donated to the corresponding relay chain treasuries. The referenda are still ongoing and are signal votes; final execution still depends on the will of holders.

Looking back at the five winners of Polkadot's first batch of parachain auctions in 2021 — Acala, Moonbeam, Astar, Parallel Finance, and Clover — most have now effectively exited or fallen into stagnation. Moonbeam officially ceased block production around July 31, 2026, and migrated its token GLMR to Base; Parallel Finance gradually shut down its products on Polkadot and Kusama after suffering a security incident, with on-chain infrastructure no longer functioning properly and users needing to manually check balances through legacy interfaces; Clover has also pivoted or departed from its original parachain identity. Among the first batch of auction winners, the one still actively maintained and continuously undergoing runtime upgrades is mainly Astar.

The core goal behind Polkadot's creation was to solve the challenges of scalability, interoperability, and security that the blockchain ecosystem faced at the time, which were difficult to balance simultaneously. Single chains like Ethereum had throughput bottlenecks, while cross-chain interactions relied on centralized bridges or complex relays, making unified security guarantees difficult. However, over time, the high barriers and capital lock-up brought by the auction model, fragmented ecosystem liquidity, and intensifying external competition made it difficult for many parachains to form markets of sufficient depth. Today, Polkadot has shifted to the Agile Coretime model, selling blockspace in a more flexible manner and advancing architectural upgrades such as JAM. Yet the gradual exit of early flagship projects has prompted the outside world to re-examine the challenges this multi-chain vision faces in practice.