Core Insights - Kinto, a blockchain project on Arbitrum, will cease operations by the end of September due to a $1.6 million hack that led to its insolvency [1] - The hack exploited a smart contract loophole, resulting in the minting of 110,000 fake tokens and the siphoning of nearly $1.55 million from lending pools, causing Kinto's native token to plummet by 95% [2] - Despite a recovery program that raised $1 million, Kinto's financial issues remained unresolved, leading to the decision to shut down [3] Financial Impact - The hack resulted in a significant loss of confidence and liquidity within the Kinto network, with the native token's value dropping by 95% [2] - Kinto's team stated that 100% of remaining safe assets would be used to repay Phoenix lenders, allowing them to recover approximately 76% of their principal [4] - Kinto's founder pledged $55,000 from personal funds to a compensation fund for victims, with plans to reimburse eligible wallet addresses up to $1,000, covering about 80% of depositors [5][6] Community Reaction - The announcement of Kinto's shutdown was met with disappointment in the crypto community, with accusations directed at the team for allegedly cashing out before the closure [8]