- Bunni shuts down after losing $8.4M in a September hack, unable to cover recovery costs.
- The platform was exploited via Ethereum and Unichain vulnerabilities; the site closed immediately.
Decentralized exchange Bunni has declared the shutdown of operations following a security breach of $8.4 million in September. The platform is the second significant cryptocurrency project to go out of business this week, following layer-1 blockchain Kadena.
The team disclosed that it had inadequate finances to proceed with development and re-establish the security of the platform after the disastrous exploit. The six or seven figures in auditing and monitoring costs alone would be needed to recover, and the protocol just cannot afford that anymore.
Financial Strain Forces Difficult Decision
Bunni had grown at a very fast pace prior to the security incident, and the total value locked increased by almost $80 million between June and August. But on September 2, malicious actors took advantage of vulnerabilities in the codebase of the protocol to attack both the Ethereum and Unichain networks at the same time.
The site shut down instantly after the hack and has been collaborating with law enforcement to reclaim stolen money. Nevertheless, the financial losses were too difficult to overcome due to the capital needs to secure relaunch and the development process.
Bunni was constructed on the Uniswap v4 infrastructure and focused on maximizing returns to liquidity providers using novel Liquidity Distribution Functions. Surge fees and autonomous rebalancing mechanisms were also included in the protocol, which made it stand out among competitors in the industry.
Bunni relicensed its v2 smart contracts under the Business Source License to the MIT license in a move that was celebrated by the cryptocurrency community. This shift to open-source enables any developer to use the technological innovations of the platform without limitations and licensing costs.
The site allows users to withdraw their assets until further notice, and no money will be stuck. The rest of the treasury assets will be shared between BUNNI, LIT, and veBUNNI token holders upon receiving the required legal approvals.
The founding team ensured that members would not get any money out of the remaining treasury, but rather, they would be compensated with tokens. The shutdown of Bunni comes after Kadena announced its closure on Tuesday, and its native KDA token has since fallen 70% to trade at only $0.06.
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Source: https://thenewscrypto.com/bunni-dex-says-goodbye-but-leaves-legacy-in-open-source/
