K9 Finance DAO to Permanently Sunset All Shibarium Products After Bridge Exploit
K9 Finance DAO voted to permanently sunset all products deployed on Shibarium, effective February 25, 2026, following the September 12, 2025 Shibarium bridge exploit. KNINE token holders recorded a high-turnout on-chain vote after months of forensic analysis and recovery attempts. The exploit stemmed from compromise of 10 of 12 Shibarium validators (none operated by K9), removing roughly 25% of KNINE supply from the bridge and leaving deployments under-collateralised. K9 exhausted recovery measures — blacklisting stolen tokens, forensic tracing, exchange escalation and joint bounties — but funds were not recovered and the bridge remained closed. As a result, the DAO determined Shibarium no longer met minimum decentralisation, security, or economic standards for K9 operations. The DAO will: migrate liquidity to a new chain, mint membership (KNINE) tokens on that chain, launch a claim portal before May 30, 2026, and release audited open-source contracts and deployment tooling for community use. K9’s full-time contributors will assist shutdowns and the decentralised handover; responsibility for ongoing compensation rests with the Shiba Inu team’s separate SOU (Shib Owes You) program. Traders should note the governance-led wind-down, token migration plans, and the partial loss of supply on Shibarium when assessing KNINE liquidity, circulating supply and short-term volatility.
Bearish
The permanent sunset of K9’s Shibarium products after a major bridge exploit is bearish for short-term market sentiment around KNINE and Shibarium-linked assets. Key negative drivers: a significant on-chain loss (~25% of KNINE supply removed from the bridge), closure of the bridge, and a DAO-delegated wind-down introduce immediate liquidity disruption and uncertainty. Token migration and a claims process create sell pressure as holders reposition for new-chain tokens and potential dilution during migration. Historical parallels: past bridge exploits (e.g., Ronin, Wormhole) produced rapid price drops, elevated volatility, and prolonged recovery periods for associated tokens and ecosystems. In the short term expect increased volatility, tighter liquidity, and downward price pressure on KNINE and possibly correlated Shibarium assets. In the medium term, outcomes depend on execution: a transparent migration with audited token minting and strong community adoption could stabilise value, but trust erosion in Shibarium infrastructure may limit capital return to the ecosystem. Overall market-wide contagion should be limited to projects directly linked to Shibarium; broader crypto markets may react briefly to risk-off sentiment but are unlikely to sustain systemic impact unless further exploits emerge.