08.09.2025 02:18

Here's a rewritten version of the news article, focusing on clarity, detail, and varied sentence structures, while removing promotional elements and the source site's branding, and focusing on internet sources:

**Internet Sources**

The Kinto project, a Layer-2 solution built atop Ethereum, is set to conclude operations on September 30th, a decision that has sent its native token, K, into a dramatic freefall. This announcement follows a costly $1.6 million security breach and unsuccessful attempts to secure further financial backing, leaving the project unable to sustain itself. The team is now actively advising users to withdraw their assets prior to the platform's shutdown.

The immediate consequence of the shutdown announcement was a precipitous decline in the K token's value, with its price plummeting by over 80%. Market capitalization subsequently dwindled to roughly $1 million, based on available data from CoinGecko. As part of the wind-down procedure, the project team has disclosed a recovery plan, aiming to reimburse lenders, particularly those utilizing the Phoenix platform, approximately 76% of their original loan principal. Crucially, approximately $800,000 worth of Uniswap liquidity has been transferred to a Foundation Safe address, facilitating a more secure handling of remaining funds.

The root cause of Kinto's demise lies in a security incident that occurred in July. This breach resulted in the loss of approximately 577 ETH, valued at around $1.6 million. The vulnerability exploited was within an ERC-1967 Proxy, a standard component typically found in upgradeable smart contracts. The team's attempts to offset this loss through additional fundraising proved unsuccessful, compounded by prevailing unfavorable market conditions. The decision to shut down stems from the team’s assessment that continued operations would only erode the dwindling funds further, prompting them to prioritize asset preservation and a structured wind-down process.

The interplay of the hack and the fundraising failures decisively sealed Kinto's fate. The July exploit targeted an upgradeable-contract pattern, which is a widely used OpenZeppelin-derived codebase. To try and recover, Kinto secured $1 million in debt, hoping to restore trading functionality. However, according to the team, they could not secure further funding. The team voluntarily ceased taking salaries beginning in July, demonstrating their commitment to the project's survival. Their adoption of a carefully planned shutdown strategy underscores their efforts to mitigate losses for both users and lenders, representing a final attempt to safeguard the remaining value within the project.