K9 DAO Governance Paper: Post-Exploit Strategic Pathways

[RoundTableOfDogs]

Part 1 — Executive Summary, Background, and Exploit Summary

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Executive Summary

This governance paper presents a comprehensive review of the circumstances surrounding the September 12, 2025 Shibarium bridge exploit, its impact on K9 DAO, and the strategic options now available to the community. In alignment with DAO-first principles and legal guidance, the Roundtable of Dogs and contributing Sub DAO members have prepared this document so that all KNINE token holders may make an informed decision on K9 DAO’s future.

K9 DAO was originally established to provide liquid staking for BONE on Shibarium and became one of the most significant contributors to Shibarium’s economic activity. Prior to the exploit, K9 DAO operated the largest validator by staked assets, launched one of the chain’s highest-impact user acquisition campaigns, and played a central role in onboarding new users to the ecosystem. As a result, the September exploit, which compromised 23% of the KNINE supply held within the Shibarium bridge, had an outsized operational and financial impact on the DAO.

Over the three months following the exploit, K9 DAO engaged in extensive recovery efforts, including emergency on-chain responses, negotiations, bounty proposals, technical investigation, and collaboration with security researchers and Shib.io team members. Despite these efforts, the stolen KNINE remains unrecovered, the Shibarium bridge remains closed, and no finalized compensation mechanism has been provided.

At the same time, chain-wide economic conditions deteriorated: transaction activity fell, total value locked declined, and the environment necessary for K9’s liquid staking model became increasingly unsustainable. As revenue neutrality eroded, operating costs continued, compressing the DAO’s runway and limiting the timeline for further delay.

This document outlines six strategic pathways for the community to consider. Each reflects a materially different outcome for the protocol, treasury, token utility, and DAO mission. The DAO is now required to determine whether to remain on Shibarium, consolidate operations on Ethereum, compensate users through the treasury, migrate to a new chain, or proceed with a full token acquisition and relaunch process.

The decision belongs entirely to KNINE holders. This governance process offers a structured, transparent, and fact-based framework so the community may determine the path that maximizes long-term sustainability, fairness to affected users, and the continued viability of K9 DAO.

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Table of Contents (Part 1 Only)

(Full table of contents will appear in Part 3)

1. Executive Summary

2. Background & Mission

3. K9 DAO’s Role in the Shibarium Ecosystem

4. Events Leading to the Governance Vote

5. Summary of the Shibarium Exploit

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1. Background & Mission

K9 DAO was founded as a decentralized liquid staking protocol for BONE on the Shibarium network. Its mandate was to enhance decentralization, improve validator participation, and provide a secure, transparent, open-source staking platform for the Shibarium community.

Key objectives included:

• Providing a non-custodial liquid staking solution

• Operating enterprise-grade validator infrastructure

• Increasing Shibarium adoption through user-friendly DeFi tools

• Building data pipelines to enhance ecosystem transparency

• Ensuring long-term sustainability through revenue-generating products

K9 DAO’s operations were intentionally designed to be heavily integrated with Shibarium. The protocol’s revenue model, infrastructure requirements, and product roadmap assumed a growing and active Shibarium ecosystem. This dependency made the subsequent exploit particularly impactful.

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2. K9 DAO’s Role in the Shibarium Ecosystem

K9 DAO rapidly became one of the most significant contributors to on-chain activity on Shibarium.

2.1 Economic Contribution

• At launch (September 2024), Shibarium TVL was approximately $1.2M (DeFiLlama).

• By December 2024, TVL exceeded $11M, with K9 products consistently ranking as the largest TVL dApp on the chain.

• K9 operated the largest validator by staked assets and maintained near-perfect uptime.

2.2 Infrastructure and Grants

K9 DAO received a Google for Startups grant to support its data ingestion, indexing, and validator infrastructure related to Shibarium.
This grant offset a portion of K9’s operating costs for one year, enabling real-time analytics, transparency tooling, and user-facing data products.

2.3 User Acquisition and Growth

K9 DAO executed a large-scale Quest campaign, valued at over $60,000, intended to onboard new users, increase Shibarium transaction activity, and transition the DAO toward revenue neutrality.

• Nearly 500,000 wallets registered for the campaign.

• Every participant required BONE to claim rewards.

• Activity meaningfully increased across the ecosystem.

The claim event—scheduled for days after the exploit—was prevented by the bridge shutdown, halting one of the most impactful growth initiatives in Shibarium’s history.

2.4 DAO Significance

K9 DAO became:

• The largest non-Shib-owned token to be affected by the exploit

• One of only two validators not compromised during the attack

• A major driver of daily chain activity and economic throughput

This context underscores why a governance decision is now required.

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3. Events Leading to the Governance Vote

The Shibarium exploit produced a fundamental disruption in K9 DAO’s token economics, user obligations, and infrastructure model. Multiple compounding factors led the DAO to the point where a formal governance vote became necessary.

3.1 The Bridge Hack

On September 12, 2025, the Shibarium bridge was exploited, resulting in the loss of approximately 23% of the total KNINE supply. These tokens remain unrecovered.

At the time:

• K9 DAO was the largest TVL protocol on Shibarium

• The DAO was preparing to launch its major user reward distribution

• The validator set suffered catastrophic compromise (9 of 11 nodes breached)

These conditions created operational paralysis for both Shibarium and K9 DAO.

3.2 Immediate Chain-Wide Effects

• The bridge was shut down

• No compensation mechanism was made available

• KNINE holders on Shibarium were left without a path to exit the chain

• Treasury runway began to compress

• Infrastructure costs continued

• TVL across the chain declined sharply

3.3 Strategic Constraints

K9 DAO’s legal counsel advised:

• The DAO has a duty to its members, not to Shibarium

• The DAO must exhaust all reasonable recovery efforts (which it did)

• A governance vote is the appropriate next step

• Delay increases operational risk due to finite runway

The DAO has now reached a point where inaction is economically, operationally, and legally untenable.

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4. Summary of the Shibarium Exploit

This section summarizes the exploit in institutionally neutral terms.

4.1 Validator Compromise

The exploit stemmed from the compromise of 9 out of 11 Shibarium validators.
K9 DAO’s validator was one of only two not breached.

The centralization of validator operation—unknown to K9 DAO at the time—was later identified as a factor that enabled the attacker to orchestrate the theft of bridge assets exceeding $4 million USD.

4.2 Impact on KNINE

• 23% of the total KNINE supply was removed from the Shibarium bridge

• These tokens were subsequently blacklisted by K9 DAO via emergency on-chain action

• Although blacklisted (non-transferable), the stolen tokens still left the bridge under-collateralized

• As a result, users on Shibarium held KNINE without backing and without a functioning bridge

4.3 Recovery Efforts

K9 DAO undertook multiple actions:

• Emergency blacklist transaction

• Engagement with Shib.io representatives

• Multiple bounty proposals (5 ETH and later 25 ETH)

• On-chain communication with the attacker

• Collaborative investigation with independent security researchers

• Escalation to KuCoin after tracing laundered funds

• Public disclosure of findings when further progress stalled

The attacker refused all bounty offers, demanding 50 ETH, and no bridge reopening plan has been finalized.

4.4 Financial Clarification

Consistent with Option 1 framing:

K9 DAO did not receive any form of reimbursement or compensation from Shib.io following the exploit. All bounty funds provided by Shib.io were returned to their originating addresses once the bounty process concluded.

4.5 Continuing Uncertainties

As of the date of this governance paper:

• The KNINE bridge remains closed

• No post-mortem has been published outlining root causes or validator decentralization measures

• No official compensation plan for KNINE holders has been delivered

• No law enforcement case information has been provided to support further recovery

K9 DAO Governance Paper: Post-Exploit Strategic Pathways

Part 2 — K9 DAO Response, Current State, Rationale for Vote, and Options 1–6

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5. K9 DAO’s Response Following the Exploit

Following the September 12, 2025 Shibarium exploit, K9 DAO undertook a coordinated response across technical, operational, legal, and governance domains. The purpose of this section is to summarize the DAO’s documented actions.

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5.1 Emergency Technical Actions

Immediately after confirmation of the validator compromise:

• K9 DAO executed an emergency blacklist transaction to freeze the stolen KNINE tokens, preventing the attacker from moving or selling them.

• The K9 validator—one of only two not compromised—was used to help stabilize Shibarium during the recovery period.

• The DAO temporarily adjusted product configurations on Shibarium based on recommendations from security researchers to reduce attack surface.

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5.2 Bounty Negotiations and On-Chain Communication

K9 DAO pursued multiple structured bounty attempts to recover stolen assets:

1. Initial 5 ETH Bounty

• Approved by DAO vote

• Delivered through an on-chain bounty contract

• Public on-chain messages notified the attacker

• Attacker responded demanding 50 ETH, rejecting the bounty

2. Second Bounty Attempt (25 ETH)

• Shib.io contributed 20 ETH to support a second recovery effort

• K9 DAO added the original 5 ETH

• Total bounty: 25 ETH

• Attacker again rejected the proposal and repeated the 50 ETH demand

All Shib.io bounty funds were later returned to their originating wallet addresses after the conclusion of the bounty process.
See Appendix for transaction footnotes.

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5.3 On-Chain Investigation

K9 developers and contracted security researchers:

• Traced stolen funds laundered through multiple transactions

• Identified ETH proceeds deposited into KuCoin-associated wallets

• Submitted findings to KuCoin, who required a law enforcement case number to act

• Shared information with a Shib.io representative, who indicated they were engaging law enforcement, but no actionable follow-up was provided

After an extended period with no progress, K9 DAO publicly disclosed the findings on X to promote transparency and encourage broader community participation in resolution efforts.

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5.4 Legal Advisory and Governance Preparation

K9 DAO’s legal counsel advised that:

• The DAO’s duty of care lies with its token holders, not with Shibarium

• K9 DAO had sufficiently exhausted appropriate recovery channels

• Continued operational delay would materially reduce financial runway

• A structured community vote was the correct governance mechanism to determine next steps

This legal guidance initiated preparation of the options presented in this governance paper.

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6. Current State of K9 DAO and Shibarium

The DAO now faces a materially altered operating environment compared to pre-exploit conditions.

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6.1 Shibarium Network Performance

Over the past year:

• Total value locked has declined

• Transaction volume has fallen

• Fewer ecosystem projects have launched compared to those departing

• Developer and advisor engagement has meaningfully decreased

Shibarium’s reduced economic activity has directly impacted K9 DAO’s revenue model, which relies on sustained validator usage and staking participation.

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6.2 Financial Runway and Operating Costs

The DAO’s runway has been compressed by:

• Continued infrastructure costs associated with its validator, liquid staking contracts, indexers, and analytics pipelines

• Market-making obligations on exchanges where KNINE is listed

• Declining staking volume following the exploit

• The halt of the Quest claim event, which was expected to materially increase revenue neutrality

K9 DAO currently estimates approximately six months of runway under existing conditions.

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6.3 Product Viability and Token Constraints

The closed Shibarium bridge creates several constraints:

• KNINE holders on Shibarium cannot exit the chain

• The stolen 23% supply leaves the bridge under-collateralized

• The original token economics are no longer functional without additional action

• Airdrop allocations tied to the Quest campaign cannot be executed on Shibarium

Without a functioning bridge or backing mechanism, users holding KNINE on Shibarium have no path to redemption, compensation, or migration unless the DAO selects an option that explicitly resolves this.

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6.4 Shibarium Compensation Status

As of the date of this document:

• No finalized compensation plan for KNINE has been delivered

• No timeline has been published

• No post-mortem report has been made available

• No validator decentralization strategy has been detailed

This uncertainty is a key factor in the DAO’s requirement to reach a decision.

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7. Why a Governance Vote Is Required

A formal governance vote is necessary due to the convergence of four conditions:

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7.1 Treasury Runway Is Finite

Continuing to operate indefinitely without resolution would force eventual shutdown of core infrastructure and product offerings.

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7.2 Bridge and Token Backing Constraints

Until the stolen 23% of KNINE supply is replaced, minted, or compensated for, the token cannot function as originally designed within the Shibarium ecosystem.

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7.3 Lack of Clear Remediation Path from Shibarium

The absence of:

• A working bridge

• A compensation plan

• A public post-mortem

• A roadmap for validator decentralization

means K9 DAO cannot plan operations based on external timelines.

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7.4 Duty to DAO Members

Legal counsel affirms that K9 DAO has an obligation to present viable paths forward to its token holders once recovery efforts have been exhausted.

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8. Strategic Options for the DAO

The DAO has identified six options reflecting materially different operational, financial, and strategic trajectories.
All options were developed collaboratively by the Roundtable of Dogs and Sub DAO contributors.

Each option below is rewritten for neutrality and clarity.
Detailed comparisons appear in Part 3.

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Option 1 — Maintain Current Strategy on Shibarium and Ethereum

Description

K9 DAO continues all existing operations on both Shibarium and Ethereum while awaiting potential compensation from Shib.io and a reopening of the Shibarium bridge.

Key Elements

• Continue validator operations and liquid staking on Shibarium

• Continue governance token functionality on Ethereum

• Delay structural changes until Shibarium finalizes compensation or remediation

• Aim to extend runway through cost reductions

Pros

• Preserves original mission alignment with Shibarium

• Maintains continuity for long-standing users

• Avoids immediate structural or technical transitions

Cons

• Dependent on external parties with no defined timelines

• DAO remains unprofitable under current conditions

• Bridge remains closed, preventing user withdrawals

• Airdrop cannot be executed unless the bridge reopens

• Significant risk of forced shutdown due to runway depletion

Impact on Users

• KNINE holders on Shibarium remain unable to exit

• Compensation is contingent on Shib.io delivery

Treasury Impact

• Runway continues to shorten

• Market maker costs persist

• Infrastructure costs remain significant

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Option 2 — Consolidate Operations on Ethereum Only

Description

K9 DAO shuts down all Shibarium-related operations and retains KNINE solely as a governance token on Ethereum.

Key Elements

• Validator and liquid staking operations end

• Cost-saving measures extend runway

• KNINE persists for governance only

Pros

• Reduces ongoing expenses

• Simplifies token utility and operations

• Extends financial runway

Cons

• Users on Shibarium remain locked until an external compensation plan is delivered

• No airdrop can occur due to gas costs and token availability

• Removes original utility of KNINE

Impact on Users

• Shibarium-based KNINE remains illiquid

• Governance becomes Ethereum-only

Treasury Impact

• Moderate improvement to runway

• Some costs retained (market-making, governance operations)

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Option 3 — Use DAO Treasury to Fully Compensate Users on Shibarium; Continue Current Operations

Description

K9 DAO uses its own treasury to replace the stolen 23% of KNINE supply, restoring bridge backing and enabling users to withdraw once the bridge reopens.

Key Elements

• DAO allocates KNINE treasury tokens to replace stolen supply

• Advisors and team members donate tokens where possible

• Any remaining deficit is purchased using ETH or USDC

• DAO continues operating Shibarium products

Pros

• Allows Shibarium users to exit once the bridge reopens

• Restores 1:1 KNINE backing

• Preserves original mission and product structure

Cons

• Nearly entire treasury would be depleted

• DAO would become financially unsustainable

• Airdrop would be cancelled due to lack of tokens

• Runway would be significantly reduced

Impact on Users

• Shibarium users made whole

• No airdrop due to depleted treasury

Treasury Impact

• Extreme depletion or near depletion

• Structurally unsustainable beyond short term

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Option 4 — Treasury Compensation with Pivot to Ethereum-Only Operations

Description

The DAO uses treasury resources to replace stolen KNINE, but only retains operations on Ethereum afterward. All Shibarium infrastructure and products would be sunset.

Key Elements

• Treasury compensates for stolen tokens

• Users urged to bridge off Shibarium

• Shibarium operations permanently closed

Pros

• Users made whole

• Reduces operating complexity

• Allows for future pivot to a new ecosystem

Cons

• Similar financial strain to Option 3

• No airdrop

• DAO becomes limited in strategic capability until treasury recovers

Impact on Users

• Shibarium users gain exit liquidity

• Long-term utility becomes Ethereum-only

Treasury Impact

• Severe depletion

• Runway remains constrained

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Option 5 — Shut Down Shibarium Operations and Mint the Missing 23% on a New Chain (Base or BNB)

Description

K9 DAO sunsets all Shibarium products and launches a parallel token representation on a new chain by minting replacement tokens. A claim portal is created for affected users.

Key Elements

• Mint 23% supply on chosen new chain (Base or BNB)

• Deploy claim portal for impacted users

• Migrate DAO treasury liquidity to new chain

• Encourage LPs to withdraw before migration to minimize impermanent loss

• Issue esKNINE or locked KNINE equivalents on new chain per defined formula

Pros

• Eliminates dependency on Shibarium timelines

• Preserves token supply integrity

• Creates a clean operational environment

• Provides path to user remediation

Cons

• Requires significant engineering effort

• Requires DAO to maintain multi-chain treasury structure

• Potential confusion during migration

• Airdrop contingent on available treasury tokens

Impact on Users

• Shibarium users compensated through new chain mint

• esKNINE and locked KNINE handled through vesting or 1:1 mapping

Treasury Impact

• Moderate expenditure

• Treasuries split across chains

• Short-term complexity increases

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Option 6 — Full Migration to a New Token via Acquisition Model

Description

A new entity acquires K9 DAO’s assets, and the DAO migrates to a new token with identical tokenomics. The migration includes 1:1 token replacement (excluding hacker-held tokens) and an accompanying brand, website, documentation, and governance overhaul.

Key Elements

• New token deployed

• Claim portal for 1:1 swap

• All vesting tokens released or remapped at agreed rate

• New branding and website

• Smart contract audits

• Sunset of all Shibarium operations

• Airdrop incorporated into new migration claim

• Remaining treasury gifted to the new entity

Pros

• Cleanest long-term break from exploit impact

• Establishes fresh foundation on new chain

• Allows DAO to rebuild reputation and utility

• Consistent with practices observed in other exploited DeFi ecosystems

Cons

• High operational and legal costs

• Requires several months of development and auditing

• Exchanges may not automatically honor new token listings

• Requires token holders to accept new terms and governance conditions

Impact on Users

• All legitimate holders receive 1:1 replacement

• Airdrop included in migration

• Hacker tokens excluded

Treasury Impact

• Significant use of treasury for audits, development, and legal restructuring

• Remaining treasury assets transferred to new entity

K9 DAO Governance Paper: Post-Exploit Strategic Pathways

Part 3 — Comparison Matrix, Voting Specification, Appendices, Disclaimer & Acknowledgements

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9. Comparison Matrix of Options

The following matrix provides a consolidated view of the six strategic pathways under consideration. It is designed to help token holders compare tradeoffs clearly and efficiently.

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Note: These weights reflect Roundtable discussion and the team’s current analysis. They’re meant to guide comparison—not dictate a decision. Please do your own research and feel free to propose alternative weights or criteria for community discussion.

10. Voting Specification

This section outlines how the DAO vote will be administered, counted, and implemented. The purpose is to ensure clarity, fairness, and governance integrity.

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10.1 Eligible Voters

All KNINE token holders are eligible to vote.
Voting weight is determined by token holdings at the time of the snapshot block.

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10.2 Voting Format

The governance vote will be conducted using ranked or single-choice voting, depending on DAO preference.
(If not specified by the DAO, default is single-choice.)

The ballot will include the following options:

1. Option 1 — Stay the Course (Shibarium + Ethereum)

2. Option 2 — Ethereum-Only

3. Option 3 — Treasury Compensation + Stay

4. Option 4 — Treasury Compensation + ETH Pivot

5. Option 5 — Mint 23% on New Chain

6. Option 6 — Full Migration via New Token Acquisition

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10.3 Passing Criteria

Simple Majority (≥50% of cast votes) unless the DAO elects to require a supermajority for structural changes.
If no option receives >50% in a single-choice vote, a runoff between the top two options will be conducted.

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10.4 Implementation

Upon conclusion of the vote:

• The Roundtable of Dogs will publish an implementation roadmap within 7 days.

• Technical, financial, and legal workstreams will be formed.

• Monthly progress reports will be issued until execution is complete.

No further governance proposals will override the result unless they receive separate approval by DAO vote.

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11. Full Table of Contents (Parts 1–3)

To support readability and organization, the complete document structure is provided below.

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Executive Summary

Part 1 — Background & Exploit Summary

1. Background & Mission

2. K9 DAO’s Role in the Shibarium Ecosystem

3. Events Leading to the Governance Vote

4. Summary of the Shibarium Exploit

Part 2 — Response, Current State & Strategic Options

5. K9 DAO’s Response Following the Exploit

6. Current State of K9 DAO and Shibarium

7. Why a Governance Vote Is Required

8. Strategic Options for the DAO (1–6)

Part 3 — Analysis, Governance Mechanics & Supporting Information

9. Comparison Matrix

10. Voting Specification

11. Full Table of Contents

12. Appendices (Footnotes & References)

13. Legal Disclaimer

14. Acknowledgements

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12. Appendices (with Footnotes)

Below are source references and footnotes for key events and data points.

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12.1 Footnotes

1. Initial Bounty Message:
   https://etherscan.io/tx/0x15043635a29f6fe140ad4a5b60beb3b4af5dd1f03aaeef30e724964122de1991
   
2. Final Bounty Threads:
   https://etherscan.io/idm?addresses=0xe211bb521fc06238535f02fdc264351a071df142,0x999e025a2a0558c07dbf7f021b2c9852b367e80a&type=1
   
3. Shib.io Post Stating an Intention to Compensate Users:
   https://blog.shib.io/shibarium-update-2/
   
4. Treasury Return of Shib-Contributed Bounty Funds:
   https://etherscan.io/address/0xbab4f3e701f6d2e009af3c7f1ef2e7dd68225e96/advanced#internaltx
   
5. Public On-Chain Tracing Thread:
   https://x.com/MRShimamoto/status/1995582570650902587?s=20
   
6. DeFiLlama TVL Data (Shibarium):
   https://defillama.com
   

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13. Legal Disclaimer

This governance paper is provided for informational and decision-making purposes only. It does not constitute financial, legal, or investment advice. Token holders are responsible for evaluating the risks and implications of each option.

K9 DAO, its contributors, and affiliated entities make no representation or warranty regarding the actions, decisions, or performance of third parties, including but not limited to Shib.io, exchanges, or validators.

All timelines, cost estimates, and technical descriptions are provided on a best-effort basis and may be subject to revision following further technical or legal review.

Participation in the governance vote signifies acknowledgment and acceptance of the information presented herein.

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14. Acknowledgements

This document was collaboratively prepared with contributions from:

The Roundtable of Dogs

• Core governance stewards responsible for framing strategic pathways

• Review and validation of technical, financial, and legal content

The Sub DAO

• Research, drafting, and analytical support

• Synthesis of community feedback and operational detail

Special recognition is given to all KNINE community members who have provided input, participated in discussion, or supported recovery efforts since the September 2025 exploit.

[Joyride01]

My thoughts sorry for any errors

#1
shiba.io & associates negligence & actions or lack of action is responsible for the Financial loss, financial Damages & defamation done to K9 DAO.
K9 DAO should have a top priority to recoup those lost cost through all means available including legal action. K9 DAO should in good faith in representing K9 holders take action to ensure those loses are recovered. K9 DAO should take action solely or with collaboration of other effected Shibarium projects.
I would also say we HIT shiba.io with false advertising. They do not have an active “ DAO” management team /sytem in place. The have deceived their investors.

How i do on this Drew ?

#2
Make K9 hole again.
I believe the minimum needed to make K9 hole again is the combination on option 1 & 6 strongly believe in a new token. Mainly we don’t need the black listed wallet hunting K9 DAO.
A new entity acquires K9 DAO’s assets, and the DAO migrates to a new token with identical tokenomics. The migration includes 1:1 token replacement (excluding hacker-held tokens). Again a cost that Shiba.io and associates should pay for or reimburse K9 DAO.

#3
Multi chain K9 bridge is need to illuminate the negligence of other organizations. Recommend we take a current project under our umbrella, build or acquire a project to finish. The bridge is intended to increase security and expand profits for K9 finance to support K9 ecosystem including rewards.

#4
Real blue print for expansion on to other chains.
BNB validator
Base validator
Polygon validator

Thank you

[Seizanshib]

Sharing som thoughts, just to put some ideas on the table while we’re looking at the different paths forward.

If we end up going down a “restart / move” route (especially something like option 5 or 6(and imo, these are the only two viable options)), I personally keep coming back to a simple priority: we need to get the DAO back into a position where it can actually generate revenue again.

Because of that, I’m leaning toward the idea of BNB first, mainly because it feels like a practical place to build and regain momentum relatively quickly (liquidity, users, existing DeFi infrastructure). Not saying it’s perfect, just that it seems “buildable” and could help us get moving again.

At the same time, I think it would be smart to keep a BTC-in-DeFi angle in mind from day one. My sense is that crypto may become more BTC-centric over time, and that BTC could gradually shift from being “just” a store of value to also being widely used as collateral and liquidity in DeFi. That’s why I’m interested in BitcoinOS (and similar efforts). I’ve only been digging into it for about a month, so I’m still learning and there’s a lot to unpack, but if it delivers on what it’s aiming for, it could make BTC meaningfully more usable across multiple ecosystems.

So the way I’m thinking about it is:

1. Cashflow first: build something simple, secure, and fee-generating on BNB so the DAO can start earning again, without depending on anyone else’s timeline.
2. BTCFi as an option: position ourselves so we can integrate BTC liquidity (like zkBTC or similar primitives) when it’s actually live, liquid, and battle-tested, but without making our whole restart depend on it.

I’m posting this mainly to get people thinking about what we can realistically do, and what direction makes the most sense.

[RyanCayon]

Stop all negotiations with the hacker. All of them. Turn a cold shoulder and treat that stolen K9 as non recoverable indefinitely. Basically cut that tie off and let it sail into the wilderness. Do not offer anymore bounties or recovery fee’s. We will just make the DAO stronger absent recovery. Demanding to “make up” for this loss is not the correct path we should take. Accountability can still be upheld by working just as hard to ensure our investments are being held safely. Lawsuits and legal proveedings by other K9 holders proves they do not have the skills or the ability to manage a DAO, you do. Make it up to us by not doing anything other than bolstering the project. In any scenario the loss of investors is inevitable. JUst keep moving forward and stop talking to the hacker and end this Cryptromance.

[CryptoQueen]

After weighing all the options, #5 seems the best strategy to preserve our treasury enough to give time to build, allows exposure to a growing new chain (I suggest BASE for its builder support, growth metrics, community support, and CB backing), and allows us to compensate holders fully.

#6 would be my second choice, but I think a full rebrand would be crazy expensive and time-consuming with a huge uphill battle and high failure risk with so many new tokens out there.

Any option that maintains Shibarium activity or depletes our treasury is a no go. We need a clean break (if not fully compensated by SHIB.io) and enough runway to set us up for success.

Kudos to the Roundtable for their thoughtful consideration of options and the professionalism demonstrated with this plan.

[wagleandfriends]

Very grateful for this thoughtful and incredibly well-presented analysis of our options.

Option 5 would have my vote.

It seems to be the only that truly breaks the deadlock and gives the DAO a clear path forward without sacrificing community, mission, or treasury.

Option 6 also has merit.

But it introduces too many unknowns. I think we need to regroup on solid, reliable ground (or whatever the opposite of Shibarium is) before planning our next big move.

[Radar]

What an extensive and informative post. Thank you for the time it took to write up. I am partial to Option 5 myself.

I do not wish to stay or engage with such poisonous and selfish people like the ones running Shibarium.

They have shown their true colors and will not change.

[turtle]

The negotiations with the attacker ended with the latest 25 ETH bounty not being accepted, so this is already the case. There are no plans to continue any negotiations or communications as the attacker has rejected all attempts.

[buzz]

I want to share a perspective that’s both honest and grounded in what the DAO has built over the last 2 years.

This entire situation is genuinely sad, because K9 DAO has delivered what I still consider to be the best product on Shibarium. Everything on the roadmap was delivered. It was done. After the Quest conclusion (which was a massive success digging into the numbers for growing users & revenue for the DAO) it was time for the product to scale. To scale back all expenses into any further, expensive development, and to double down on user acquisition campaigns to drive users who would, in turn, make the product revenue. This was the viable and sustainable path forward for K9, to operate on Shibarium, with significant potential

Compared to other liquid staking solutions across other chains, K9 has operated on a shoestring budget and still managed to attract top-tier developer talent at well below market rates. That only happened because of the belief in what Shib and Shibarium could become.

A comment from one of our developers hired over a year ago really captures that early spark:
“I was wowed that the Shib account with 4m followers retweeted my work.”
That sense of excitement, momentum, and mission alignment was real, and it was a core reason K9 became what it did. Recruiting top talent became much easier with the vision and alignment.

But over the last 3–4 months, that energy has understandably faded. Top talent has received offers elsewhere that are hard (if not impossible) to compete with. The lack of communication, the lack of growth across the chain, and the absence of a clear path to making the hack right for K9 users have all taken a toll. And we need to acknowledge something honestly:

There is no guarantee that spark ever comes back.

K9 was born to be the liquid staking solution for Shibarium. That was the project’s purpose from day one. Any option that veers away from that reality needs to be acknowledged honestly: there is no guarantee that K9 will ever be a liquid staking protocol again under those paths.

And to frame this properly, we need to decouple two things:

1. What to do because of the hack and the lack of response from Shib.

This vote is only about recovering from the Shibarium hack for the Shibarium users.
It should not be coupled with the question “What does K9 do next?” because no one has a magic wand for that right now.

2. What the community wants K9 to become next.

That is a completely separate discussion — one that can only happen after the DAO solves the immediate crisis. Then, the responsibility is on the DAO to chart a path forward, recognizing that the immediate crisis is to get some relief for those who were impacted in the hack.

---

The Impact of Waiting

Waiting for a solution for over three months has created serious damage:

• BONE holdings in the DAO treasury have fallen nearly 50%
• TVL in the K9 product has fallen nearly 50%
• Revenue has dwindled
• Our ecosystem exposure has suffered significantly

So not only has the DAO’s revenue shrunk, but the assets that K9 holds (because they are tied to Shibarium’s performance) have also fallen hard.

Many people ask me, “Well, what’s the best option?”
And the reality is simple:

There is no good option.

The good option was for Shibarium to succeed, for the K9 liquid staking product to work as intended, and for the token and treasury to grow linearly with Shibarium demand.
But that demand has collapsed, and the time K9 has to wait is getting shorter every month.

The good option was, to take the revenue positive product from Shibarium, and be able to fund and scale the product to other chains. This was based on the assumption that the DAO business model would be sustainable and self-financing due to the success on Shibarium.

Remember: the K9 product shares 95% of validator rewards with its users. The primary way that the DAO makes revenue is through product fees (zaps) & token taxes (and those taxes were lowered via DAO vote early on in the project)

Why is the runway getting shorter?

Because since the hack, K9 DAO has been operating at a significant monthly loss.

There are:

• Infrastructure costs
• Increasing legal costs (solely to guide how to move forward from the hack, as no one within the DAO has experience with this)
• Real employees who depend on K9 to earn their monthly wage
• SubDAO contributors
• Developers who maintain this protocol every day

And there are upcoming deadlines:

• The Google grant ends February 26th, which currently covers $12–15k/month in infrastructure
• After that, costs will need to be drastically streamlined
• That may mean shutting down testnet, free Agent 9 access, Dune dashboards, and other tools K9 built for the Shibarium community, which is a sad but realistic possibility

Another major constraint:

• K9 has been unable to bridge KNINE into Shibarium since the hack
• As of January 7th, esKNINE will begin running on fractional reserves

You cannot run a product as sophisticated as K9 without a working bridge.
Developers can’t meaningfully build forward without an agreed-upon direction & right now they are stuck mapping hundreds of hypothetical scenarios instead of executing a real plan.

---

The Reality for KNINE Holders on Shibarium

This must be stated clearly:

If someone holds KNINE on Shibarium today, it is effectively worth $0.

(unless the bridge is somehow made whole)

Because of the hack:

• There is no backing in the bridge
• No reserves
• No redeemability
• No path out
• No mechanism for migration
• No timeline for restoration

These tokens are stranded until a solution is chosen.

And to be very clear (because the K9 DAO lawyer has emphasized this to the Roundtable):

K9 DAO is not legally obligated to fix this.

The responsibility lies with Shib, because:

• The stolen KNINE was in the Shibarium bridge,
• K9 does not own or control or have access to that infrastructure,
• The K9 validator operated as intended during the exploit,
• And token holders are not equity holders with investor rights (according to the token terms that all DAO members accepted)

(don’t shoot the messenger)

This is not unique to K9; this is the legal structure of 99% of crypto projects.

Anything K9 does to remedy the hack is:

• Ethically motivated
• Voluntary action
• Community-driven
• An act of goodwill to those who used the product in good faith

In the Roundtable meetings, I was personlly clear:

Priority #1 is the people who actually used the K9 product.

Those who staked, bridged, supported, and trusted the protocol.
They are the ones who currently hold unbacked assets. Any vote for what to do I will be voting in what I perceive is in their best interest

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How to Think About the Options (My Decision Matrix)

Here is how I suggest people approach the vote:

Question 1:

Do you believe Shib.io will compensate K9 users?
If yes, that narrows the choices.
If no, eliminate all options relying on Shib.

Question 2:

Do you believe Shibarium will enter a significant growth phase in the next 3–4 months?
If yes, that narrows the choices.
If no, eliminate all options requiring continued dependence on Shibarium.

If your answer to both is “no,” then:

It makes no business sense to choose any option that relies on Shib.io or Shibarium.

The remaining options are the ones that treat the hack as final and force K9 to solve the problem independently.

---

Closing

We need to be honest about where responsibility lies and honest about what is possible given the DAO’s current treasury, runway, and mission.

This vote is not about the future vision of K9.
It is about how to stop the bleeding, how to protect users, and how to finally move forward so the developers can execute instead of tread water.

Once this is resolved (with any of the options presented), then the DAO can have a real conversation about what comes next and allocate resources appropriately to do that

[Oruen.san]

You’ve helped me with my doubts, now I know I’ll vote for option 5.

[Heezy]

Hey everyone, I want to start by saying I agree with a lot of what’s been said here. The framing around this vote being about stopping the bleeding, protecting affected users, and giving the team a direction to execute from Buzz is spot on.

Where I differ slightly is in how I think we best resolve the immediate crisis without boxing the DAO into long-term complexity or extending uncertainty.

For me, the real decision narrows down to Option 5 vs Option 6, because they’re the only paths that treat the exploit as final and allow K9 to act independently of Shib.io timelines. I don’t believe it makes sense, from a business or risk perspective, to choose any option that relies on compensation or growth from Shibarium in the near term.

Between those two, I lean toward Option 6 — not because it defines what K9 must become next, but because it creates the cleanest conditions for that conversation to happen at all.

Option 5 solves the immediate supply hole, but it does so by patching the existing token and infrastructure. Over time, that leaves the DAO managing legacy baggage: blacklisted supply, parallel representations, historical bridge edge cases, and a more complex story to explain to exchanges, partners, and new contributors. That complexity doesn’t just affect engineering — it slows governance and makes every future decision harder to reason about.

Option 6, while heavier upfront, fully resolves the exploit in one step:

• legitimate holders receive a clean 1:1 replacement
• hacker-held tokens are excluded
• the broken bridge and under-collateralized history are left behind
• audits, contracts, and tokenomics are reset into a single source of truth

That matters because it allows developers to stop mapping hypothetical scenarios and actually execute, and it allows the DAO to have future-vision discussions without constantly referencing technical exceptions from the past.

I also want to address the concern that this vote shouldn’t decide “what K9 becomes next.” I agree — and I don’t see Option 6 as doing that. I see it as closing the chapter on the hack cleanly, so the DAO can then decide its future from a position of clarity rather than crisis. In contrast, some of the other options risk dragging that uncertainty forward through multiple votes and interim fixes, which consumes time we don’t really have given the runway.

From a credibility standpoint, I also think a full migration with clear documentation and audits is easier to defend externally than a partial mint-and-migrate approach. After an exploit of this size, clarity and simplicity matter — especially if K9 wants the option to rebuild reputation, attract contributors, or explore new directions later.

So for me, Option 6 isn’t about optimism or ambition. It’s about:

• stopping the bleeding decisively
• treating affected users fairly and transparently
• reducing long-term complexity
• and giving the DAO the best chance to decide its future after the crisis is resolved, not while it’s still ongoing

I fully respect that others may prefer Option 5 as a more incremental step. I just see Option 6 as the cleaner reset that compresses uncertainty instead of extending it — and that’s why it remains my preferred path forward. Looking forward to hearing other perspectives — this is just my honest assessment as a loyal holder.

[Hondabmw]

Dear K9 friends,

First of all, I would like to express my sincere gratitude to the entire K9 team. I am truly thankful for all the time and energy that is being invested in K9.

On a personal level, it hurts to see the direction in which Shibarium has declined. I have been a SHIB holder since 2021 and looked forward to Shibarium with great optimism. In hindsight, Shy’s presentation of Shibarium at the Ethereum conference may have been a warning sign. A celebratory introduction of Shibarium with death as its central theme—how could anyone think that was appropriate?

Unfortunately, Shibarium has not delivered what many of us had hoped for. In my view, remaining on Shibarium is only possible with guarantees that Shib.io either cannot or does not want to provide. Even if such guarantees were given, I seriously question whether they would be honored. At a minimum, the following would be required:

Full compensation for the hack, either through the purchase of K9 tokens or by reimbursing the costs required to migrate to K9 v2.

The purchase of K9 tokens could be done in phases: initially 20 ETH to restore the bridge and provide liquidity, followed by the purchase of 1 billion tokens per month until full compensation is achieved.

Deactivation or removal of inactive or problematic individuals, such as Mazrael.

Full support from Shib.io for K9, for example by providing an LP pool (SHIB/BONE or SHIB/K9) on Bonecrusher, accompanied by active marketing from the Shib team.

A well-founded and realistic plan outlining how Shib.io intends to expand the number of projects on Shibarium.

A dedicated point of contact for the K9 team to ensure direct and efficient communication.

A respectful attitude toward K9.

There is more that could be added, but honestly, I have lost my trust in Shib.io.

As a result, options 5 and 6 remain open. Option 5 has the advantage of hedging our bets—if Shibarium eventually becomes successful, Bonecrusher could be re-implemented quickly.

My biggest concern with option 5 is that the hacker would still hold tokens in their wallet. How would future investors perceive this? Additionally, how secure is the frozen wallet? Could it be unlocked through another hack or due to a mistake by future developers?

My personal preference would be option 6, allowing us to make a clean and fresh start.
If Shib.io were to present a suitable and acceptable solution, it would have to involve a new contract that permanently excludes the frozen wallet.

[Jand057]

For me option 6 seems to make the most sense. I like the idea of a clean reset.

[My_Name_Is_Mudd]

#5 is my vote.

Having read through everything, multiple times, being very well tapped in to the bridge hack, the exploits, and hearing everything we have been told about partnerships (lack there of) plus the social sentiment of baseless attacks and accusations.

K9 will thrive elsewhere, and option 5 allows the most financially sound path forward for K9 as an entity and the holders therein.

[Curdog]

After reading the proposal yesterday my initial thought was Option 6 would be my vote with Option 5 my second choice. Reading the comments up to now I still feel the same way but I am open minded to continue learning more details between those two options.

If Option 5 had other chain possibilities I would consider it a bit more; just not a fan of Base or BNB. If they are the only chain options then I lean toward Base.

[Frank]

Any comment or input i can give wiil be based on these perspectives business,community, team building and leadership. The development perspectives are way out of league. Option 5 in my opinion is our best path forward.We all know opinions can change. My desire is to see the K9 DAO (project) succed. Reading all the options and some other very good input kinda makes that clear to me. Ok we say option 5 seems to be getting the most support. there is still tons of work and decisions that have to be made. What are the next steps forward? Heard mention of a pre vote.. Would that be a vote to sunset Shibarium? I dont think i need to point out all the facts that would lead one to choose option 5 or 6..Thats been made pretty clear in all the on going communication. It was also made pretty clear in this doc we are all reading and commenting on. I would like to say this.. if you have all the confidence in the world that Shibarium is gonna survive and thrive I promise K9 won’t live to see it. We need to do what it’s gonna take to survive and thrive..I wrote this from the heart without any AI like usual..lol

[Shibaworld2024]

Strong Support for Remaining on Shibarium – Advocating Patience and Ecosystem Synergy (Options 1 or 3)

As a long-term $KNINE holder deeply invested in the Shiba Inu ecosystem, I strongly advocate for K9 Finance DAO to remain committed to Shibarium. My entry into K9 was entirely driven by its integral role within the Shib family—providing essential liquid staking infrastructure for $BONE and contributing significantly to chain activity and adoption.The symbiotic relationship between K9 and Shibarium is undeniable: K9’s products have historically driven substantial TVL, validator participation, and user onboarding, while Shibarium provides the foundational layer and community backing that gives $KNINE its core utility and narrative strength. Severing this tie (as in options 2, 4, 5, or 6) would fundamentally erode the project’s unique value proposition and long-term potential…I support either Option 1 (maintaining current operations while awaiting resolution) or Option 3 (proactive treasury compensation to restore backing, followed by continued Shibarium focus), with a preference for whichever best preserves sustainability. In the current macro environment, patience is a strategic advantage. With a bull market on the horizon, driven by institutional inflows, regulatory clarity, and broader crypto adoption—premature pivots risk missing the explosive growth that a revitalized Shibarium could deliver. History shows that resilient ecosystems reward those who weather short-term challenges…So with that alone, let’s prioritize unity, exhaust all remediation paths, and position K9 to capitalize on the upcoming cycle within the ecosystem that birthed it. The pack is strongest together. 100 fkn percent

[Frank]

The treasury can"t withstand long term potential.. With no volume and no revenue (not to mention no support no communication from the core team) on the chain K9 DIES…Do you realize I havent looked this week but last week one day Shibarium created $2… Thats $2 in revenue. We have to be realistic…Its not a permature piviot it’s a last shot effort to survive

[Shibaworld2024]

I get where you’re coming from Frank…low volume and revenue right now is brutal, and the runway worry is real. No one’s denying Shibarium’s activity has been in the dumps lately …like daily fees scraping rock bottom some days, i get it. And yeah, communication from the core team has been quiet, which sucks. But pivoting away now feels like jumping ship right before the storm clears, im sure you can agree yeah? We’ve waited through worse bear stretches already…why bail when the macro is finally turnin? BTC is leading the charge, and if SHIB’s treasury (or ecosystem liquidity) is heavily positioned there ~as many big players are guessing~ then when Bitcoin pumps hard into this bull run, the whole pack wins BIG. Institutional signals are stacking up too, Frank: T. Rowe Price including SHIB in their ETF filings, UAE partnerships rolling out real-world utility. That’s not noise, that’s fuel waiting to ignite. K9’s strength has always been tied to Shibarium’s community and brand, im sure we can both attest to that. No other chain gives us that built-in audience or narrative. Patience here isn’t blind hope, it’s positioning for the rebound we’ve earned. We’ve grinded this long—let’s not sell the farm at the absolute low. I could think of millions of other ways to piss away my investment opposed to this precise way. Strong lean toward Option 1 or 3. Pack holds.

[Fvds]

Great discussion going on everyone!

Personally i don’t think K9 can have a bright future on Shibarium. Probably like most of you all i still hope that Shibarium will recover, but to be honest after all what happened and the terrible and eerily slowly communication from their dev team, before you know it we could be many months in 2026 before real action is taken, if there is actually any real intent of doing so. I myself can never trust them again sadly my positive sentiment is nonexistent at this point towards that “team”. Also i do not see them stepping up and take responsibility.

As stated we do not have that time and luxury to wait and find out because of our own resources would run dry way before that.

OPTION 5 sounds like a decent way forward and gets my main Vote!

Base is really legit i think and will have a insane growspurth of users in the future i believe.

The undertone feeling i always had with BNB is not a good one, i think it is a sketchy chain.

I am really liking everything i see on Xrp chain as of late and have become quite the fan of their ways, maybe a interesting new option to explore? Though i don’t know yet how K9 would for in that picture.

Eth chain is still very nice as well and we are already present that makes things easier, maybe keep that a our main chain.

OPTION 6 would be the second best decision i think, but i am generally not a fan of relaunches as they usually don’t end well. And all the previous promo materials, memes and everything made will become obsolete within an instant. Probably many years of work gone like a thanos finger snap.

So yeah a relaunch can be a very fresh start, it will definitely be a lengthy costly & time consuming process. Not a easy path either way.

My two cents