Kinto Token, the governance token of the Kinto network, plummeted more than 80% after the team announced that the Ethereum Layer-2 blockchain would be shut down at the end of September following a few months of set-up.
Kinto raised $1 million to recover “modular exchange” trade after an industry-wide hack in July emitted about $1.6 million worth of around $577 ether (ETH) from the protocol.
However, Kinto posted on Medium on Sunday as the worsening market situation was “killing more funding” and was forced to shut down its crypto project.
“Every day we continue, our funds go down even further. It has been operating without pay since July and after the final fundraising channel is over, one responsible choice remains.
The $1.6 million hack was attributed to a security vulnerability in the ERC-1967 Proxy standard. This is a common Openzeppelin codebase that allows you to upgrade smart contracts without changing addresses. Several other projects were also affected.
Kinto denounced the Hack’s failure and rising financial pressure, but one onlooker pointed to the offering of high annual yields at Stablecoins, even after the Hack, where Kinto struggled to make money.
Ramon Recuero, one of Kinto’s founders, said in April that K Staking provided an annual yield of 130% at USDC (USDC). Other decentralized finance platforms with high yields have had a rocky past.
The project is built on Arbitrum, leveraging Ethereum Mainnet for settlements, and also offers tokenized stock trading from Apple, Microsoft, Nvidia and others.
That modular exchange attempted to combine the efficiency of centralized exchanges with the security features provided by distributed exchanges.
Kinto announces recovery plans
All remaining assets, including $800,000 in UNISWAP liquidity, will be moved to foundations that will be distributed to “Phoenix” lenders “take risk” lenders to help Kinto reboot. They are expected to recover 76% of the Lawn Principals.
Kinto and Recuero have also set up “goodwill grants” for hack victims, each receiving $1,100 per affected address. Recuero said he would donate more than $130,000 in his own funds to provide relief.
Kinto said it will continue to collect lost assets, saying it will share it with the community via Snapshot, the voting platform normally used by decentralized autonomous organizations.
The Kinto team urged users to withdraw their assets by September 30th. You will then need to claim the assets through a permanent billing agreement that Kinto plans to create.
Kinto is Recuero’s second failed crypto project
Kinto closed Recuero’s second Crypto venture, following Babylon Finance, and was shut down in November 2022 after falling victim to a $3.4 million hack earlier that year.
Similarly, Recuero said his team forced Babylon to shut down just six months after the public release, similar to the “failing to revive the negative momentum” caused by the hack.
Related: Ethereum L2 Starknet suffers from a 2nd mainnet shutdown in 2 months
80% near K Token Falls
According to Coingecko data, Kinto (K) has tanked 81.4% to $0.46 since the team announced the news.
Almost a month after hitting an all-time high of $14.5 million on August 14th, the Kinto Token was launched in April four months ago.
Magazine: Astrology may make you a better crypto trader: it is foreseen
