Decentralized exchange Bunni has announced it is shutting down operations following an $8.4 million exploit in September. It is the second crypto project to fold in the same week blockchain firm Kadena declared bankruptcy and ceased business operations.
According to a brief statement written on X post Thursday, the Bunni team confirmed it would be closing down due to a lack of funds, struggling with the extensive financial and technical burden required to rebuild after losing funds to hackers.
“In order to securely relaunch we’d need to pay six to seven figures in audit and monitoring expenses alone, capital that we simply don’t have. It’d also take months of development and business development effort just to get Bunni back to where it was before the exploit, which we cannot afford. Thus, we have decided it’s best to shut down Bunni,” the team wrote.
Bunni permanently closes its doors after September exploit
Ethereum-based decentralized exchange BunniXYZ suffered the exploit in September after one of its smart contracts was compromised, Cryptopolitan reported. According to blockchain data, the attacker targeted stablecoin vaults holding USDT and USDC, before funneling roughly $2.3 million worth of assets through several decentralized finance (DeFi) protocols.
Blockchain investigators found that the hacker moved the stolen tokens by converting parts of the loot into ETH and other stablecoins. The BunniXYZ team closed all active smart contracts to prevent further losses after detecting the breach, but the exploiter was still swapping funds through DeFi protocols in the hours that followed.
Bunni mentioned that users would still be able to withdraw their assets via the project’s website “until further notice.” The team also stated plans to distribute treasury assets to holders of BUNNI, LIT, and veBUNNI tokens based on a blockchain snapshot.
“The validation of the legal process is ongoing, and the exact details of the distribution will be shared at a later date once the legal process is finalized. Team members will be excluded from the snapshot,” Bunni asserted.
Developers also announced that the Bunni v2 smart contracts have been relicensed from Business Source License (BUSL) to the more permissive MIT license. This change will allow the broader DeFi community to reuse its technologies, including Liquidity-Directed Fees (LDFs), surge fees, and autonomous rebalancing mechanisms.
“We have pushed the AMM [automated market maker] space forward by a generation, and it would be a shame if our efforts went to waste,” the team stated.
Bunni promised to continue cooperating with law enforcement in efforts to recover the stolen assets. “Thank you to everyone who has supported us throughout our journey to push DeFi forward,” the post concluded.
The decision to shut down prompted a response from security auditing and Sequoia Capital-backed firm FailSafe, which offered to assist Bunni to keep its operations going.
Kadena’s closure preceded Bunni’s
Bunni’s shutdown came just over a day after blockchain infrastructure company Kadena revealed it was ceasing operations due to bankruptcy. In a statement posted on Tuesday, Kadena said it was “no longer able to continue business operations” and would immediately halt all activities and maintenance of its blockchain platform.
The company told users the closure was a result of deteriorating market conditions, adding that it had notified its employees and would retain a small team to oversee the transition and wind-down process.
“The Kadena blockchain is not owned or operated by the company. As a thoroughly decentralized proof-of-work smart-contract blockchain, the network is operated by independent miners, while on-chain smart contracts and protocols are governed independently by their maintainers. We will be encouraging all node operators to upgrade as soon as possible,” the team stated.
Kadena reiterated that its native token, KDA, and its protocol will continue to operate post the company’s exit. The blockchain’s tokenomics show more than 566 million KDA still available as mining rewards, which will be distributed through 2139.
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Source: https://www.cryptopolitan.com/bunni-dex-kadena-shuts-down-8-4-m-exploit/
