Oracle Switchboard to Cease Operations, Migration to be Completed by September 25
The multi-chain oracle Switchboard has announced it will cease operations, with core developer Switchboard Technology Labs gradually winding down remaining business. All implementations will stop maintenance immediately, with remaining support ending on September 25. Dependent protocols are required to migrate immediately to alternatives such as Pyth and Redstone.
The project has been providing a permissionless, customizable data layer since 2021, and launched a permissionless feed creation tool in 2022. In May 2024, it completed a $7.5 million Series A round, led by Tribe Capital and RockawayX, with participation from Solana Foundation, Aptos, Starkware, and Mysten Labs. The official reason for the shutdown is attributed to three factors: AI reducing the cost of building proprietary oracles, the bear market decreasing new blockchain and project budgets, and direct connections from data providers like Hyperliquid and S&P weakening third-party network premiums.
A security incident occurred just before the shutdown. At the end of August, deployments on Move chains such as Aptos, Sui, IOTA, and Movement were paused due to suspected key compromise; the price on IOTA was altered to $10 million, with attackers minting approximately 4.94 million VUSD through Virtue CDP. Following the impact on the Sui ecosystem's Full Sail, it decided to shut down, with Virtue suffering a loss of about $455,000 and 45 users being liquidated. The official statement indicated that contributors and node operators exited after the vulnerability, leading to immediate abandonment of the implementation. The Solana deployment code was different and was not affected by the same vector at that time.
There is only one week left for the migration window. Lending, perpetual, and synthetic assets that have not switched will lose pricing, and liquidation and collateral rate updates will cease. Protocols that have simultaneously integrated Pyth, Chainlink, or Redstone can continue to operate.
In market mechanics, this represents a middle layer being hollowed out from both ends: upstream data providers supplying data directly, and downstream protocols using AI to build their own pricing. What is being sold is multi-chain custom feed subscriptions, while what is being bought is shares of leading oracles and proprietary data pipelines from exchanges. Funds are shifting from small and medium oracle tokens and node rewards to Pyth, Redstone, and perpetual platforms that can connect directly to S&P; beneficiaries are protocols with redundant pricing, while those under pressure are integrators that rely solely on a single source and have just been compromised.
The shutdown is a result of compounded operational and security issues, not a temporary maintenance situation.
Source: Public Information
ABAB AI Insight
Switchboard positioned its permissionless customization as a product, selling the idea that "every chain can pull its own feed" during the new chain boom. With fewer new chains in the bear market, customization is no longer scarce; AI has reduced the engineering costs of building price feeds, leading protocols to question why they should still pay third-party networks. Hyperliquid's direct connection to S&P transforms oracles from public middleware into exchange supply chains. The key compromise has burned the remaining trust in one go, and after node exits, the network cannot maintain a decentralized appearance.
The capital path involves using blockchain foundation endorsements to exchange for multi-chain coverage in the 2024 Series A round, with revenues tied to new chain launch budgets. As budgets shrink and security incidents further drain operators, the $7.5 million has not translated into liquidation-level reliability to compete with Chainlink or Pyth. Downstream protocols are voting with their feet: those that can migrate are doing so, while those that cannot, like Full Sail, are directly liquidating.
Similar cases include small and medium RPC nodes being absorbed by Alchemy and Infura, and independent data APIs being replaced by exchanges building their own market data. The oracle industry is in a control phase: general pricing has leading networks, special data has direct supply sources, and the customizable layer in between has lost its pricing power.
This is a case of technological replacement. The mechanism is that as data production becomes cheaper and data sources are willing to connect directly, the middle network is left with only security reputation to sell; once that reputation is broken, the network is instantly zeroed out. AI has not eliminated the demand for pricing; it has eliminated the "rental cost of maintaining a set of nodes for each new chain."
ABAB News · Cognitive Laws
The pricing power of the middle layer dies when both ends start to handshake.
When customization is no longer scarce, only security remains to charge for.
Once the key is compromised, the migration window closes faster than the narrative.