The Kinto token, the governance token of the Kinto Network, has plummeted over 80% after its team announced the shutdown of its Ethereum layer-2 blockchain due to financial pressures and a $1.6 million hack in July draining about 577 ETH. Kinto’s modular exchange struggled to recover, leading to the project’s closure.

The $1.6 million hack resulted from a security vulnerability in the ERC-1967 Proxy standard, affecting several projects. Kinto’s high annual percentage yield offerings on stablecoins, even after the hack, contributed to financial pressures. The project also offered tokenized stocks and aimed to combine centralized exchange efficiency with decentralized exchange security.

Kinto unveils a recovery plan to distribute remaining assets to “Phoenix” lenders, offering 76% of their loan principal’s recovery. A “goodwill grant” will provide $1,100 per affected address for hack victims. The project will continue recovering lost assets and share any excess recoveries with the community via a voting platform.

Kinto’s founder, Ramon Recuero, previously faced project closure with Babylon Finance, another crypto venture that fell victim to a hack. Kinto marks Recuero’s second failed crypto project, following Babylon’s closure in 2022 after a $3.4 million hack. The Kinto token has dropped 81.4% to $0.46 since the announcement, with its market cap hovering just above $1 million.

Read more at Cointelegraph: Kinto Tanks 81% After Announcing Its Blockchain Will Shut Down