Decentralized exchange Bunni has announced it is shutting down following an $8.4 million exploit in September. This marks the second crypto project team to cease operations this week, citing difficult circumstances.
In a statement on X, the team stated that it will be winding down operations due to a lack of funds.
"The recent exploit has forced Bunni's growth to a halt, and in order to securely relaunch, we'd need to pay 6-7 figures in audit & monitoring expenses alone – requiring capital that we simply don't have," they said.
The team further explained that they would need to spend a considerable amount on development costs and other expenditures to get the protocol back on track, resources which are currently unavailable.
This announcement follows closely behind the news that the founding team behind layer-1 blockchain Kadena also announced it would cease operations due to challenging market conditions.
Bunni DEX Suffered Exploit in September
The protocol was exploited on September 2, resulting in a loss of $8.4 million across the Ethereum and Layer-2 network Unichain. Following the exploit, operations were halted.
In a post-mortem blog post on September 4, Bunni detailed that the malicious actors exploited the protocol’s codebase.
Bunni DEX was built on Uniswap V4, designed to optimize returns for liquidity providers through its custom mechanism known as the Liquidity Distribution Function.
Prior to the exploit, Bunni experienced significant growth, with its Total Value Locked (TVL) increasing from $2.23 million on June 10 to nearly $80 million on August 19, according to DefiLlama.
Open-Sourcing Bunni V2 Smart Contracts
Despite ceasing operations, the Bunni team has relicensed its V2 smart contracts from a Business Source License to the MIT license, a widely recognized open-source software license. This move has been met with positive reception from the community.
This relicensing enables any developer to utilize Bunni's innovations, including its Liquidity Distribution Functions, surge fees, and autonomous rebalancing capabilities.
The team has also announced that users will be able to withdraw their assets via the website until further notice. Furthermore, remaining treasury assets are slated for distribution to BUNNI, LIT, and veBUNNI token holders, pending necessary legal approvals. Team members will not receive any portion of these funds.
Bunni's team stated they will continue to cooperate with law enforcement agencies in efforts to recover the $8.4 million stolen by the malicious actors.
Kadena Founding Team Discontinues Network Operations
On Tuesday, the founding team behind the Layer-1 blockchain Kadena announced that it would be winding down and ceasing all network operations.
The team cited challenging market conditions as the primary reason for closing operations. Despite the founding team's departure, the Kadena network is expected to continue to exist and operate as a community-driven project.
Following the announcement, Kadena's native token KDA experienced a significant decline, crashing 70% and currently trading at $0.06, according to CoinGecko.