The Kinto Network is shutting down its Ethereum Layer-2 blockchain at the end of September, sending its governance token tumbling 81%. The move follows months of struggles after a $1.6 million hack in July exploited a vulnerability in the ERC-1967 Proxy standard, affecting multiple DeFi projects.
Although Kinto raised $1 million in debt to resume trading on its modular exchange, poor market conditions prevented further fundraising. Critics pointed to Kinto’s excessively high APYs, including 130% yields on USDC staking, as a major weakness.
Kinto had sought to blend centralized exchange efficiency with decentralized security. Its platform, built on Arbitrum, even offered tokenized stock trading of firms like Apple and Microsoft. But the combination of a crippling hack, financial pressure, and overextended yield promises has forced the project to wind down operations within months of its launch.
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