Kinto Token Plummets Over 80% as Network Announces Shutdown

The Kinto token, the governance token of the Kinto Network, has collapsed by more than 80% after the team announced that its Ethereum layer-2 blockchain will shut down at the end of ￰0￱ decision comes after months of setbacks, including a major hack and worsening market conditions that prevented further fundraising ￰1￱ announcement was made in a Medium post on Sunday, where the team explained that operating without salaries since July left them with no choice but to close the project and protect users as best as ￰2￱ crisis began in July when an industry-wide hack drained around 577 Ether, worth roughly $1.6 million, from Kinto’s modular ￰3￱ vulnerability was traced to the ERC-1967 Proxy standard, a common OpenZeppelin codebase that allows smart contracts to be upgraded without changing their ￰4￱ other protocols were also affected by the ￰5￱ raising $1 million in debt to restore trading, Kinto’s plans for recovery were hampered by a deteriorating market , which “killed further fundraising,” according to the ￰6￱ Yields and Market Risks Kinto’s financial strain was also linked to its high annual percentage yield ￰7￱ after the hack, Kinto continued to offer yields as high as 130% on USDC staking, one of the highest in the decentralized finance (DeFi) ￰8￱ aggressive strategy, according to critics, contributed to unsustainable ￰9￱ onlooker noted that such high yields were a warning sign, especially given the challenges the protocol faced ￰10￱ on the Arbitrum network and leveraging Ethereum for settlements, Kinto aimed to combine centralized exchange efficiency with decentralized exchange ￰11￱ also offered tokenized stock trading, featuring assets like Apple, Microsoft, and ￰12￱ Shutdown Plan and Support for Affected Users Kinto’s recovery plan includes distributing its remaining assets, including $800,000 in Uniswap liquidity, to “Phoenix” lenders who helped fund its ￰13￱ lenders are expected to recover approximately 76% of their loan ￰14￱ team is also establishing a “goodwill grant,” with each affected user receiving $1,100.

Founder Ramon Recuero has pledged over $130,000 of his own funds to assist ￰15￱ recoveries exceed victim amounts, the surplus will be distributed through community voting on ￰16￱ have been urged to withdraw assets by September 30, after which claims will be processed through a perpetual claim ￰17￱ marks the second failed venture for Recuero, who previously shut down Babylon Finance following a $3.4 million hack in ￰18￱ the shutdown announcement, Kinto’s token has dropped 81.4% to $0.46, with its market cap barely above $1 million—down from a $14.5 million peak just a month ago.