Scroll DAO pauses governance as some executives resign

Scroll layer 2 DAO has paused operations after leadership resignations, sparking concerns over decentralization.

Scroll DAO, the governance body linked to Ethereum’s (ETH) zkEVM scaling project Scroll, is pausing operations after key leaders stepped down, according to a Sept. 10 post on X by DAO delegate Olimpio.

Governance pause and leadership exit

The decision follows the resignation of DAO leader Eugene and comes amid what Scroll (SCR) co-founder Haichen Shen described as a “redesign” of governance. Growth lead Raza emphasized the use of the word “pause” rather than “stop” or “dissolve,” though the reasoning behind the move remains unclear.

The leadership is still debating whether to honor the current proposals, which include one pertaining to treasury management. Team members seemed unclear about which proposals were active, according to delegates, indicating a communication and procedural breakdown.

The announcement sparked debate within the community, with concerns that the restructuring could tilt Scroll toward a more centralized approach. Some observers described the situation as “turmoil,” pointing to the lack of transparency and a defined roadmap for restoring governance.

Community reaction and Scroll layer 2 ecosystem growth

Scroll DAO had only recently launched its Community Council initiative on Aug. 15, offering three paid seats to oversee regional nodes and grant distribution. That experiment in decentralized management now faces an uncertain future.

Despite governance troubles, Scroll’s ecosystem continues to expand. Scroll and Makinafi announced a partnership on Sept. 8 to introduce institutional-grade decentralized finance strategies via stablecoin vaults, aimed at both enterprise and retail users.

There is still more than $185 million in corporate vaults powered by Scroll, indicating that its zkEVM infrastructure is still in high demand. So far, the SCR token has not reacted negatively to the news, up 2.3% in the last 24 hours.

The governance pause brings to light a growing conflict in decentralized projects, which struggle with striking a balance between community-led management, operational complexity, regulatory pressures, and leadership turnover. Until clarity is obtained, the uncertainty may result in increased volatility for the SCR token.