Decentralized exchange Bunni has officially announced it will shut down operations after an $8.4 million exploit in early September, becoming the second crypto project to go bankrupt this week amid a wave of setbacks in the decentralized finance (DeFi) sector.
Key Takeaways:
- Bunni DEX is shutting down after an $8.4 million exploit drained funds from Ethereum and Unichain.
- The team cited a lack of capital to cover relaunch and security costs, which halted all future development.
- Bunni’s v2 smart contracts are open source under the MIT license, allowing developers to reuse the technology in new DeFi projects.
In an X-post on Thursday, the Bunni team said it could not continue operating due to a shortage of funds needed to rebuild and secure the platform.
“The recent exploit has stalled Bunni’s growth, and to safely restart we would have to pay six to seven figures in audit and monitoring costs alone – which requires capital we simply don’t have,” the team wrote.
Bunni Exploit costs $8.4 million on Ethereum and Unichain
The exploit, which took place on September 2, cost $8.4 million in Ethereum and the layer-2 network Unichain, leading to an immediate shutdown of operations.
A subsequent blog post on September 4 confirmed that attackers had exploited vulnerabilities in the protocol’s codebase.
Built on Uniswap v4, Bunni aimed to optimize returns for liquidity providers through a custom system known as the Liquidity Distribution Function.
Before the exploit, the protocol had experienced explosive growth. According to DeFiLlama, its total value (TVL) increased from $2.23 million in June to almost $80 million in mid-August.
Although Bunni will no longer operate, the team has open-sourced its Bunni v2 smart contracts, relicensing it from Business Source License (BSL) to the MIT License.
This move will allow developers to freely integrate Bunni’s innovations, including liquidity distribution, peak fee, and autonomous rebalancing features, into new DeFi projects.
The decision drew praise from parts of the community for preserving the project’s technical contributions.
Users can still withdraw assets via the Bunni website until further notice, and the remaining treasury assets will be distributed to BUNNI, LIT and veBUNNI token holders once regulatory approvals are received.
Team members do not receive any portion of this money. The team added that it continues to work with law enforcement to recover the stolen funds.
Kadena announces closure amid “difficult market conditions”
The closure of Bunni follows the recent closure of Kadena’s founding team, which also cited “difficult market conditions.”
Despite the exit, Kadena’s network remains operational, although the native token KDA has fallen more than 70% since the announcement and is currently trading around $0.06 per CoinGecko.
Kadena’s mainnet went live in January 2020 and promised to combine Bitcoin-style security with high throughput via an architecture known as “braided chains.”
At its peak in 2021, Kadena’s token reached a market cap of nearly $4 billion, supported by a growing community and a $100 million grant program for Web3 developers. But the network struggled to attract sustainable adoption.
This is evident from data from DeFiLlamaKadena’s total value in DeFi has fallen to just $128,000, down 71% in 24 hours and far from its all-time high of $11 million in August 2022.
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