K9 Finance DAO Shut Down Logistics

General
1

K9 community,

This post is an operational update focused on logistics and required user actions as K9 transitions away from Shibarium and executes the DAO-approved sunset + migration process to community-run operations & ownership.

0) Why This Is Happening

K9 is winding down the Foundation and moving away from Shibarium in accordance with the DAO vote and as a direct result of the Shibarium bridge exploit, which compromised approximately 25% of the total supply of KNINE membership tokens — at no fault of K9 DAO.

It is a sad story, but the reality is:

  • Impacted users have not yet received a committed compensation remedy from the Shiba Inu team

  • As a result, the DAO took it into its own hands to provide a remedy through an orderly migration plan

  • K9 DAO’s viable product plan was to be the official liquid staking on Shibarium, and despite being the most successful project on the chain, the chain could not sustain a liquid staking product in profitability & the project has run out of funding

  • K9 DAO delivered on all roadmap items and more and for continued development past migration it is up to the community

  • Crypto has entered a severe bear market, with K9 DAO treasury assets (ETH, BONE, SHIB) decreasing the runway of K9 even further

1) Accountability: What Happened on Shibarium

The Shibarium bridge was exploited following the compromise of 10 out of 12 validators, all operated by the Shibarium team.

Independent assessments of validator decentralisation and operational risk concluded that validator concentration at this level constitutes a systemic security failure and is not an appropriate environment for DAO-level financial infrastructure.

The Shib team did take accountability for the hack, messaged that they would make users whole, but indicated that they do not have the finances to do so yet. Unfortunately, K9 DAO operations do not have the time and/or budget to wait and continue operating.

K9 DAO is not responsible for the hack of Shibarium and our users having their tokens stolen

2) Shib Compensation / “Payback” Questions

The Shiba Inu team has stated there would be compensation efforts on their own timelines.

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source - 🚨 Shibarium Bridge Security Update

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source - Shibarium update

All questions regarding any Shib compensation effort must be addressed to them directly.

  • There is no longer any contact or negotiation on behalf of the K9 community; community members may choose to follow updates and take communication with the debtor into their own hands

  • K9 DAO does not control Shibarium infrastructure. K9 DAO has no involvement in the bridge or the payback responsibility on behalf of the Shib team. All losses are verifiable on-chain with public infrastructure and is the responsibility of the Shib team to calculate and make users whole

  • Any claims related to bridge-loss reimbursement are the responsibility of the Shibarium team and can be addressed to their team. K9 DAO’s action to move away from Shibarium should not disqualify any and all users from compensation from the Shib team

3) Foundation Winding Down

As part of the DAO-approved wind-down:

  • The K9 DAO Foundation is winding down operations

  • Contributors and core developers will support the transition until completion of the DAO vote execution

  • After migration completion, the continuation/evolution of K9 becomes fully community-led

  • The community may choose to adopt the DAO resources moving forward for governance purposes & elect new representatives for functions within the DAO

Recent Announcement - https://www.bitget.com/amp/news/detail/12560605172428

4) Important: Current Dev Team Scope (No New Liquid Staking Launch)

To avoid speculation:

The current dev team does not have plans to launch liquid staking elsewhere

Their mandate is strictly:

  • Execute the DAO vote (shut down & migrate users’ Shibarium tokens to a working chain)
  • Mint users’ membership tokens on a new chain
  • Deliver a secure claim portal
  • Support shutdown + open-source release of the existing Shibarium-based codebase, should others want to run the software

5) Required User Actions: Withdraw + Remove Liquidity by February 24th :red_circle:

:white_check_mark: Withdraw ASAP

Users should withdraw from all Shibarium-deployed K9 systems as soon as possible.

:white_check_mark: Remove all K9 liquidity on Shibarium by: Feb 24 :red_circle:

This includes:

  • LP positions

  • staking/farming positions

  • liquidity on any pools associated with K9 contracts

:white_check_mark: Revoke access / approvals by: Feb 24 :red_circle:

Users should also remove contract approvals connected to K9 on Shibarium.

This is a security best practice for all EVM users, and especially important during deprecation / shutdown processes.

Any KNINE, vKNINE or esKNINE holders on Shibarium do not need to take any action with these tokens, as they will be accounted for in the February 25th snapshot

6) Validator Update: Commission Set to 0% (Withdraw ASAP)

Effective immediately:

  • K9 validator commission has been set to 0%
  • all users should withdraw / exit validator-related positions ASAP :red_circle:

Commission being set to zero is not a long-term incentive program. It is a final operational setting to reduce friction during wind-down. All validator withdrawals are reliant on Shibarium infrastructure and will need to happen on the Shib.io website with their infrastructure and support

The K9 Shibarium validator will be shut down by February 25th

7) Exchanges

A number of exchanges or market makers may choose to honour/support the transition and continue supporting KNINE, but this remains discretionary.

  • Some exchanges may support migration

  • Some may require manual user action

  • Some may choose not to support at all

Users must ask exchanges and/or market makers directly what their plans are and create or develop new relationships as needed. Holders, as per the terms and conditions of membership, choose to use third party exchanges at their own discretion

8) Contract Address

The KNINE token contract address remains unchanged & will be the same contract address on the new chain for historical/reference purposes.

Migration will involve:

  • Membership tokens minted on a new chain
  • Governance continuity maintained through the claim process
  • One-time liquidity migration from Shibarium to the new chain

The only tokens migrating to the new chain (as voted by the community) are the tokens impacted in the Shibarium hack. Membership token holders on Ethereum need not take action.

9) Hacker Funds Status

Funds associated with the exploit remain in the attacker’s wallet. These tokens will still be viewable for all to see on Etherscan and this wallet will likely always be the largest wallet holder of KNINE

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10) Treasury Address Change

K9 will need to create a new treasury address on the new chain to host treasury operations. This is to support any needed bridge liquidity from the migration chain to the root chain and is a requirement as part of the migration

As a result:

  • The old treasury identity (k9safe.eth) will become inaccurate for treasury tracking going forward
  • Third-party trackers may inaccurately represent the health of the DAO

This is one of many DAO-data updates the community will need to coordinate over time (trackers, docs, dashboards, listings, etc).

The k9safe.eth address will not be used going forward

11) Open-Source Codebase After Shutdown

Following shutdown:

  • Audited smart contracts
  • Documentation
  • Deployment tooling

…will remain publicly accessible as an open-source codebase as a public good. This is not something that DAO was required to do, but is something it wanted to do for its members.

The Shibarium team or any community member may host/operate/modify at their own discretion, expense, and model as a token of appreciation to the Shibarium community for the support that they have given K9. It would mean the world if someone else were able to cost-effectively operate liquid staking with our open source infrastructure for the community

Open-source code will be published to K9 Finance DAO · GitHub

12) Migration + Claim Portal Timeline

Planned sequence:

  1. DAO members confirm chain of choice for the migration via vote
  2. Development & audits of new infrastructure to support migration
  3. Membership tokens minted on new chain
  4. Liquidity migrated as a one-time migration from Shibarium to new chain
  5. Token claim portal launched
  6. Treasury migrated to new chain to support bridging
  7. Website hub launched as permanent archive
  8. K9 codebase fully open-sourced

Claim portal expected: prior to May 30, 2026

How long will users have to claim?

The claim window will be clearly announced once the portal is live. It is expected to be 30 days. After the 30-day window users may be unable to claim their tokens on the new chain if their current tokens are on Shibarium

Key Dates:

  • February 6-11: Chain vote on where KNINE membership tokens on Shibarium will be migrated to
  • February 24: remove all Shibarium liquidity related to K9 products
  • February 24: revoke access & approvals to any and all K9 products
  • February 24: last day to withdraw knBONE from Shibarium without delay. After this date, it may take up to 1 month to bridge knBONE off of Shibarium and there may not be technical support available to assist
  • February 25: Snapshot of KNINE, vKNINE, & esKNINE on Shibarium. After this snapshot block, any purchases, earnings or sales of K9 DAO tokens will not be recognised in the migration
  • February 26: K9 Shibarium validator shut down
  • February 27: K9 Google Grant ends (software costs must now be borne by the DAO treasury)
  • May 29: no more support for knBONE bridging off of Shibarium. ALL USERS MUST MIGRATE BY THIS DATE. PREFERABLY BY FEB 24
  • May 30: possible knBONE freezing on Shibarium
  • May 30: membership token claim on new chain
  • May 30: liquidity migration from Shibarium to new chain
  • June 1: K9 Foundation fully wound down & may not receive development support pending funding. Governance and future moves are handed solely to the community as per token membership vote and new representatives may be chosen to represent the DAO

*The above dates are subject to change based on factors outside of the control of K9 DAO

13) Liquidity Migration Plan Between Chains

Liquidity migration principles:

  • The community will vote on the chain of choice
  • K9 treasury may be used for liquidity bridging between chains
  • Only liquidity from Shibarium will be migrated and added to the new chain

If additional liquidity is required:

  • The community must propose DAO liquidity provisioning efforts

  • Governance must pass + fund those efforts, as there are no plans to add additional liquidity and K9 DAO does not have the viable budget to do so, unless the community votes to put the remaining treasury assets all into the liquidity pool to effectively wind down any small funding available to the community post-migration for their operational efforts

14) Airdrop Update (Separate Effort After Migration)

An airdrop was originally intended but could not be executed as planned due to the exploit and bridge impairment. K9 was in the midst of a 90-day Quest campaign that garnered over 500,000 participants, which would be the largest rewards program by users and value on Shibarium in history. A

Airdrop will be:

  • A separate governance/community effort
  • Designed and executed after the migration
  • Subject to its own proposal and approval
  • At the community’s discretion

15) Community Decision Point: What Happens Next

K9 DAO did everything it could to succeed, but was lured to build on Shibarium - which ultimately proved to have:

  • Poor security conditions
  • A declining userbase
  • No meaningful volume to earn revenue for the DAO
  • Unclear leadership key performance indicators
  • Slow development
  • Lack of strategic direction

The litepaper of K9 was executed and products are winding down due to lack of viability as per the vote of the DAO

This is despite K9 being the most successful Shibarium DeFi product by every major usage metric.

Moving forward, the community will need to decide:

  • Does K9 continue operating and building utility? Who in the community will build this? Does K9 become a meme?

  • Does the community recruit new contributors and organize working groups? Do we continue to fund existing working groups?

  • Does the community scale beyond this transition?

If the community does not want to continue operations:

  • The DAO may vote to add remaining treasury assets (after expenses) into liquidity

This would be the next step in the operational wind-down.

16) Dev Support Commitment

The current contributors/devs will support the transition up until the completion of:

  • Product shutdown
  • Open-source releases
  • Membership token + claim portal delivery
  • Migration execution requirements passed by DAO vote
  • Liquidity migration to the new chain
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