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Layer 2 Public Goods Network to shut down by mid-2024

Public Goods Network (PGN), a Layer-2 scaling solution for Ethereum backed by Gitcoin, announced that it will gradually cease its operations and dissolve its chain by June 2024.

In a series of tweets on Jan. 17, the PGN team shared a “bittersweet update” on the future of the network, which aimed to fund the world’s public goods by generating revenue from network sequencer fees and returning them to public goods projects.

The team said that the decision was not easy, but a realistic evaluation highlighted the challenges in meeting their goals of generating significant funding for public goods. One of the main challenges was the inability to implement Contract Secured Revenue (CSR), a fee-splitting model that would allow smart contract developers to claim a percentage of the transaction fees paid by users when interacting with their contracts.

“Unfortunately, CSR is not a technology we could implement alone on the Superchain, which meant that it could not serve as a key differentiator for our network,” the team tweeted.

The Superchain is a network of Layer-2 chains that share security, a communication layer, and an open-source development stack, as proposed by Optimism, one of the leading Layer-2 solutions for Ethereum.

PGN was the third chain to launch on the Superchain in July 2023, after Base (a Layer-2 solution developed by Coinbase) and Z (a marketplace for NFTs). However, the team said that the Superchain interoperability infrastructure and developer tooling were still under development, which made PGN’s growth challenging for a small team.

The team also cited the difficulties in attracting users to migrate to PGN without the convenience of a scaled network, and the lack of liquidity on bridges, decentralized exchanges, and core infrastructure like a Safe UI. Moreover, the team said that PGN could not compete with the increasing competition between Layer-2s, especially without the promise of a future airdrop, as a native token was less aligned with PGN’s financial model.

“Ultimately the Tx volume on PGN was not sufficient to generate positive revenue,” the team admitted.

Despite the challenges, the team said that having a network dedicated to public goods brought together the best people and projects, passionate about public goods. The team also expressed gratitude for the support from the community, contributors, and partners, especially Gitcoin, the platform that supports open-source development and public goods funding.

The team also praised the builders who contributed valuable development and infrastructure to PGN, calling them “true regens”.

The team said that they hoped that the lessons learned and the relationships formed during the PGN journey would continue after the network sunsets. They also said that they were open to discussions with anyone who wished to support or take over PGN, and would love to see what a new future home and use case for PGN might look like.

From today until June 2024, the community can withdraw all their assets from PGN through the main bridge or other cross-chain solutions like Superbridge.

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