K9 Finance Threatens to Cut Ties with Shibarium: What’s Next for the Ecosystem?
Another day, another potential crypto divorce. K9 Finance—a key player in the Shiba Inu ecosystem—just fired a warning shot across Shibarium's bow. The message? Shape up, or we ship out.
The Stakes for Shibarium
This isn't just a minor spat. K9 Finance's integration is a core piece of Shibarium's DeFi puzzle. Their tech provides essential liquidity and staking mechanics. Losing them wouldn't be a simple setback—it would be a major blow to the layer-2 network's credibility and utility. Projects don't threaten to leave without cause; this is a pressure play, plain and simple.
Behind the Warning
While the official statement cites "strategic divergences," the subtext screams of unmet expectations. It's the classic crypto story: a project builds on a promising new chain, then hits roadblocks—slow development, clunky infrastructure, or maybe just a lack of support. K9's move suggests the Shibarium dream isn't matching the on-chain reality. After all, in DeFi, loyalty lasts exactly as long as the incentives do.
What Happens Now?
The ball is in Shibarium's court. They can scramble to address K9's concerns, offering concessions or accelerated roadmap items. Or, they can call the bluff and risk a messy, public uncoupling. Either way, the community is watching. Token holders hate uncertainty almost as much as Wall Street hates a good idea—and this drama injects a hefty dose of it right into Shibarium's heart.
One cynical take for the road: In an industry where "partnership" often means a retweet and a vague graphic, a threat to leave might be the most honest form of communication we get.
K9 Finance DAO issues ultimatum to Shibarium devs
According to K9 Finance, the platform adhered to all protocols requested by Shiba Inu during the post-hack recovery process. The team claims it kept communication channels with the Shiba Inu team open throughout the months following the attack, but that correspondence eventually ceased.
“K9 Finance DAO has followed every step requested by the SHIB team regarding the Shibarium bridge hack and the process to make affected users whole… At this time, we have received no further communication or guidance in any of our private chats with the Shib team. The decision should not be interpreted as an attempt to create drama. It is a necessary step to provide clarity to our holders and ensure responsible governance.”
K9 Finance DAO
As reported by Cryptopolitan in mid-September, the attack began with a flash loan used to acquire 4.6 million BONE tokens. This temporarily granted the attacker control over two-thirds of validator voting power on Shibarium’s Layer-2 network.
The hacker used the vulnerability to extract 224.5 ETH, valued at roughly $1.03 million, and 92.6 billion SHIB, worth about $1.27 million. Other tokens, including Doge Killer (LEASH), Shiba Inu’s TREAT, and Shifu (SHIFU), were also stolen but were moved days after the breach, according to blockchain records.
The breach came from a compromised checkpoint where the perpetrators inserted a fraudulent Merkle root. After this malicious root was added, the attacker executed a large transaction to drain approximately $1 million, which ballooned to $2.8 million at the time of this reporting.
Out of the twelve validator signing keys, ten approved the hacker’s malicious root state and withdrew the assets, with only validators run by K9 Finance and UnificationUND shunning the request.
“If no complete restitution is provided by that date, the DAO will formally convene and vote on our future relationship with Shibarium, including whether continued business on the chain remains viable for the long-term health of the K9 ecosystem,” the organization’s statement concluded.
Shiba Inu down 36% after Shibarium smart contract hack
The hack and the ensuing dispute rattled the broader Shiba Inu ecosystem, leading to a 36% price downturn in the SHIB token, which was trading at $0.00000826 on Saturday morning. The price level is a few points above its year-to-date low of $0.00000753, although the coin is 70% below its year-on-year highs.
Following news of the exploit, SHIB initially spiked to $0.0000148 but fell to $0.0000137 within 24 hours, a 7.4% decline. Yet, despite the turbulence in the Shibarium ecosystem, there are indications that Shiba Inu’s fundamentals may be improving.
One positive metric is token burn activity, which saw its rate increase by 170% on Friday, bringing the total tokens burned since inception to over 410.75 billion. The number of SHIB tokens held on exchanges dropped to 288.75 trillion from this month’s high of 366.1 trillion, and could mean the market is exhibiting stronger buying interest towards Christmas.
Whales, or large investors, have increased their holdings significantly, currently controlling 96.67 billion tokens, up from this week’s low of 1.36 billion.
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