K9 Finance DAO Announces Final Sunset of Shibarium Products

January 2026

In response to the Shibarium exploit, DAO members approved an operational wind-down and community-led transition beyond Shibarium

K9 Finance DAO announced the DAO-approved, orderly, and permanent sunset of all products deployed on Shibarium, effective February 25, 2026. The decision was made following the September 12, 2025 Shibarium bridge exploit and the subsequent determination that Shibarium no longer meets the minimum decentralisation, security, or economic standards required for responsible K9 DAO operations.

This decision was reached through a formal governance vote of K9 DAO token holders, with record-setting participation, reflecting the seriousness of the circumstances and the community’s commitment to resolving the situation transparently and decisively.

DAO-Led Decision With Record Participation

K9 Finance DAO is, and has always been, a fully decentralised autonomous organisation.

After exhausting all reasonable recovery, remediation, and negotiation paths, the DAO was presented with a structured set of options. Following extensive public discussion, KNINE holders voted to sunset all Shibarium-based products, marking an unfortunate but necessary outcome driven by a number of factors. 

This decision was not taken lightly. It represents the collective judgment of the community, recorded on-chain, after months of diligence, analysis, and engagement.

A Record of Leadership, Delivery, and Ecosystem Contribution

A history of K9 Finance DAO shows that they historically performed well. The DAO executed against a clearly defined roadmap — on time, on budget, and with over-delivery — supported by ecosystem partnerships and external validation.

Some of these highlights include:

• Record-setting total value locked (TVL) on the Shiba Inu Layer 2

• The largest DeFi protocol on Shibarium with the most daily active users (DAU); with over 500,000 users across its products

• The most widely used utility in the Shiba Inu ecosystem

• Material SHIB burn contributions are larger than any other Shibarium products

• A DAO-managed budget that gave the product operational runway for many years with dedicated upgrades & maintenance, while also exploring expansion opportunities through DAO-voted exploration funding programmes

• A fully decentralised contributor base exceeding 1,000 active DAO participants that produced open source, audited smart contracts across all product lines

In 2025, K9 Finance DAO was selected as a recipient of a $200,000 Google Cloud Grant for Web3 Startups, awarded in recognition of its software development, validator infrastructure, analytics tooling, and open-source contributions.

Audited, Open-Source Infrastructure Left for the Community

K9 Finance DAO has consistently prioritised audited, open-source development.

As part of the sunset process, all Shibarium-based K9 products — including smart contracts, documentation, and deployment tooling — will remain fully audited, open source, and publicly accessible.

This enables the Shibarium team or any independent community member to host, operate, or modify these systems at their own discretion, expense, and business model.

Following the sunset, the K9 DAO Foundation will no longer be responsible for hosting, maintaining, or operating these services.

Root Cause of the Exploit and Independent Findings

On September 12, 2025, the Shibarium bridge was exploited following the compromise of 10 out of 12 validators, all operated by the Shibarium team. K9 Finance DAO’s validator was not compromised.

Independent assessments of validator decentralisation and operational risk concluded that validator concentration at this level constitutes a systemic security failure and is not an appropriate environment for DAO-level financial infrastructure.

Approximately 25% of the total KNINE supply was removed from the bridge and remains unrecovered, leaving the Shibarium deployment economically impaired and under-collateralised. These findings materially informed the DAO’s decision to sunset.

Exhaustive Recovery Efforts

Following the exploit, K9 Finance DAO undertook extensive good-faith recovery efforts, including:

• Emergency on-chain actions to blacklist stolen tokens

• Joint bounty initiatives with Shib-affiliated contributors

• On-chain communication with the attacker

• Independent forensic tracing of stolen assets

• Escalation to centralised exchanges

• Public disclosure of findings when progress stalled

Despite these efforts, the stolen assets were not recovered, the bridge remained closed, and no finalised compensation plan or remediation timeline was delivered.

The Shiba Inu team publicly announced that they would compensate all impacted users, but their compensation plan consisted of a product called a Shib Owes You (SOU) program in which impacted users would receive an NFT on-chain that represented the amount that they were owed. They announced their recovery efforts would be made incrementally to these NFT holders, and impacted users are still eligible for Shiba Inu’s compensation plan and should contact Shiba Inu directly regarding these. 

Orderly Sunset, Liquidity Migration, and Decentralised Transition

As approved by DAO vote:

• All Shibarium-based K9 products will sunset on February 25, 2026

• Liquidity currently deployed on Shibarium will be migrated to a new chain

• Operational bottlenecks will be handed to the community to further decentralize control

K9’s full-time development and operations contributors will assist with product shutdowns, open-source releases, and the delivery of a fully audited membership token and secure claim portal on a new chain.

A new decentralised website hub will be launched and hosted as a permanent community archive and historical record of K9 DAO.

Following this transition, the continuation and evolution of K9 will rest entirely with the community.

DAO-Governed Migration and Claims Process

Following DAO approval:

• K9 membership tokens will be minted on a new chain

• Tokens will represent DAO membership and governance rights

• A claim portal is expected prior to May 30, 2026

• All affected users will be notified through official K9 channels

Any claims related to losses arising from the Shibarium bridge exploit must be addressed to the Shibarium team, as K9 Finance DAO does not control or operate Shibarium infrastructure.

Conclusion 

K9 Finance DAO is a truly sad story. The DAO delivered on its roadmap, exceeded its mandate, and upheld the highest standards of decentralised development.

This sunset is not a failure of the DAO — it is the consequence of infrastructure conditions that no longer meet the requirements of trustless, community-governed systems.

K9 leaves behind a legacy of audited code, open infrastructure, and a decentralised future — now governed entirely by its community.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.