- Bunni shuts down after losing $8.4 million in a hack and lacks the funds to recover.
- Bunni’s smart contracts are now open source to help developers build new DeFi projects.
- Kadena’s team exits amid tough market conditions, with token value dropping over 70%.
A decentralized exchange (DEX) called Bunni declared that it will halt its operation after a $8.4 million exploit in early September. The team disclosed that the financial loss has plunged it into a lack of adequate capital to meet relaunch and security expenses. It has, therefore, stalled further development. This is the second crypto project to close this week due to the continued challenges in the decentralized finance (DeFi) industry.
The exploit occurred on September 2, draining funds from both the Ethereum network and the layer-2 solution, Unichain. Last year, Uniswap launched Unichain, a new Layer 2 blockchain that speeds up transactions and cuts costs for DeFi users. Following the attack, Bunni immediately stopped all platform activities.
A detailed report later confirmed that attackers exploited vulnerabilities within Bunni’s protocol code. The team stated that securing and relaunching the platform would require significant auditing and monitoring expenses. These expenses are between six and seven figures, which can no longer be afforded by the project.
Rapid Growth Followed by Sudden Collapse
Before the hack, Bunni experienced rapid growth fueled by its unique features. Built on Uniswap v4, the platform used a Liquidity Distribution Function to enhance returns for liquidity providers. This innovation attracted many users and pushed Bunni’s total value locked (TVL) from $2.23 million in June to nearly $80 million by mid-August. This growth showed strong market interest, but it was not enough to protect the platform from the security breach.
Despite the shutdown, the Bunni team took steps to preserve its technical contributions. It open-sourced the Bunni v2 smart contracts and changed the license from Business Source License (BSL) to the more permissive MIT License. This allows developers to freely use features like liquidity distribution, surge fees, and autonomous rebalancing in new DeFi projects.
Community Access and Fund Distribution
Users can still withdraw their assets from Bunni’s website until further notice. The remaining treasury assets will be distributed to holders of BUNNI, LIT, and veBUNNI tokens after legal approvals. The team made it clear that none of these remaining funds will be given to any members. Besides, the Bunni team is working with the law enforcement agencies to recover the stolen money.
Wider Impact on the DeFi Sector
The closing of Bunni comes after the closing of the founding team of Kadena, which is another crucial happening in the crypto industry. Kadena cited tough market conditions as the reason for its exit. While Kadena’s network remains active, its native token KDA has lost over 70% of its value since the announcement. It now trades near $0.06 according to CoinMarketCap.
Kadena launched its mainnet in January 2020 with promises of combining Bitcoin-level security with high throughput. Its innovative “braided chains” architecture aimed to support large-scale adoption. Kadena achieved a nearly $4 billion market capitalization in 2021, when it hit its highest point. It also provided Web3 developers with a grant program of $100 million. Yet, the network did not retain the attention of the users, and its DeFi TVL fell as low as $128,000 recently and dropped 71% within a day; DeFiLlama shows.
These shutdowns underscore a persistent problem in the DeFi ecosystem, where both security and market factors continue to weigh on projects and investors.
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