Scroll network dissolves DAO Security Council after $160M outflow
Scroll network announced it will dissolve its DAO Security Council and transfer full control to an internal team within 10 days. The move follows falling activity and capital flows, as the team says Security Council operating costs no longer make sense. Scroll network also reiterated that smart-contract decisions will remain on-chain, transparent, and verifiable.
The governance change comes after earlier fee controversy. In April, Scroll network reportedly increased its data transmission fee by 1,280x, triggering an artificial jump in 30-day aggregate on-chain fees. Users paid about $50,000 in extra transaction costs before the fee was rolled back on April 9.
It also follows an ecosystem hit from Ether.fi’s migration to OP mainnet. Ether.fi reportedly moved ~300,000 user accounts and led to about $160M of total value assets leaving Scroll. DeFiLlama data cited in the report also estimates roughly $13M in annualized fees departing, with Scroll TVL dropping to about $23M.
For traders, this combination of governance restructuring and negative capital flows can raise near-term volatility around Scroll ecosystem tokens and on-chain liquidity, while pressuring DeFi TVL-linked demand.
Bearish
Scroll network is taking cost-cutting governance action after a clear capital/fee outflow tied to Ether.fi’s migration to OP mainnet. That combination is typically a negative signal for the ecosystem’s near-term fundamentals: lower TVL and fee generation can translate into weaker sentiment and reduced liquidity depth.
In the short term, uncertainty around the Security Council dissolution and the optics of the April 1,280x fee spike can keep traders on edge, encouraging risk-off positioning and wider spreads for Scroll-linked assets. In the long term, if the move truly reduces overhead while preserving on-chain transparency, it could stabilize governance efficiency—but the market will likely demand proof via renewed TVL/fee momentum before turning more constructive. Overall, based on the stated $160M outflow and the TVL drop to ~$23M, the balance of signals is bearish for Scroll itself.