Bunni Exploit Results in $8.4 Million Loss Across Ethereum and Unichain

Bunni DEX Shuts Down Following $8.4 Million Exploit, Citing Insufficient Funds for Relaunch

Bunni DEX Shuts Down Following $8.4 Million Exploit, Citing Insufficient Funds for Relaunch

Bunni, a decentralized exchange (DEX), has announced its closure after an $8.4 million exploit. The team has cited a lack of funds necessary for a relaunch and security measures as the main reason for this decision. Despite its operational end, Bunni’s innovative technology will remain available for developers through open-sourcing its smart contracts.

Key Takeaways:

Bunni DEX is ceasing operations after losing $8.4 million through an exploit affecting both Ethereum and Unichain networks.
The team indicated that they lack the capital to manage the relaunch and necessary security costs, leading to a complete halt in future developments.
Bunni’s version 2 smart contracts have been made open-source under the MIT License, enabling developers to incorporate its technology into other decentralized finance (DeFi) projects.

On Thursday, the Bunni team shared via an X post that they can no longer continue their operations due to funding shortages required for platform rebuilding and security measures.

“The recent exploit has brought Bunni's progress to a standstill, and to relaunch securely, we require a budget of 6-7 figures solely for audits and monitoring,” the team stated. “Unfortunately, we simply lack this capital.”

The exploit occurred on September 2, draining $8.4 million across both Ethereum and the layer-2 network Unichain, which led to an immediate halt in all operations.

A follow-up blog post on September 4 confirmed that the attackers had exploited weaknesses in the protocol's code.

Bunni was built on Uniswap v4 with a goal to enhance returns for liquidity providers using a system known as the Liquidity Distribution Function.

Before the exploit hit, the protocol experienced rapid growth, with total value locked (TVL) increasing from $2.23 million in June to nearly $80 million by mid-August, as reported by DeFiLlama.

Although Bunni will no longer be operational, the team has decided to open-source its Bunni v2 smart contracts, changing the licensing from Business Source License (BSL) to the MIT License.

This allows developers to freely integrate Bunni’s innovations—such as liquidity distribution functions, surge fees, and autonomous rebalancing—into new DeFi initiatives.

This decision has received positive feedback from parts of the community, as it helps preserve the project’s valuable technical contributions.

Users will still have access to withdraw their assets through the Bunni website until further notice. The remaining treasury assets are set to be distributed to BUNNI, LIT, and veBUNNI token holders once legal approvals are obtained.

Team members will not receive any part of these funds. The team reiterated their commitment to working with law enforcement to reclaim the stolen assets.

Kadena Shuts Down Amid Challenging Market Conditions

Bunni’s closure is similar to the recent shutdown of Kadena’s founding team, which also pointed to “difficult market conditions” as the driving factor.

Despite this exit, Kadena’s network continues to operate, though its native token, KDA, has fallen over 70% since the announcement and is currently trading around $0.06, according to CoinGecko.

Kadena’s mainnet went live in January 2020, aiming to merge Bitcoin-like security with high throughput through its “braided chains” architecture.

At its peak in 2021, Kadena’s token reached a market cap of nearly $4 billion, buoyed by a growing community and a $100 million grant program for Web3 developers. However, the network has faced challenges in maintaining ongoing adoption.

As reported by DeFiLlama, Kadena’s total value locked in DeFi has plummeted to just $128,000, reflecting a 71% drop within 24 hours and falling far below its all-time high of $11 million in August 2022.