Conic Finance, a three-year-old DeFi protocol that once held over $156 million in investor deposits, has shut down more than a year after a pair of exploits that left the project on life support.
The developers behind Conic were unable to fix several security bugs identified in an upcoming version of the protocol, they said in a blog post Friday.
Conic’s token, CNC, fell more than 80% after the announcement, to just over $0.01. At its all-time high, the token traded above $10 and had a total market value just shy of $50 million.
“Over the past months, the core team has been working on a new version for Conic,” the company said in a blog post Friday.
“However, despite working with auditors, the team did not manage to come up with sufficient fixes to several issues of the new version. Ultimately, this made the team feel not fully confident in releasing the new and audited version.”
During development of the new version of the protocol, several developers left the team, adding to the frustration of those who remained, according to the blog post.
“I’m sad; I thought the idea was a great addition to what we had at the time in DeFi. When the hack happened, I instantly lost over 90% of what I had — $80,000 lost,” an investor in Conic’s token CNC, who spoke on condition of anonymity, told DL News.
“I decided not to sell after the hacks — I was now an accidental long term holder.”
Conic allowed users who provided liquidity in Curve, a decentralised exchange, to diversify their exposure to Curve’s token pools.
With $1.8 billion in crypto deposits, Curve is the second-largest decentralised exchange on the Ethereum blockchain. It’s particularly popular for stablecoins, in part due to its deep liquidity for such tokens.
Conic’s troubles began in July 2023, when it suffered a pair of unrelated exploits in quick succession, losing $3 million to the first and $300,000 to the second.
The total value of crypto deposited in Conic plunged from $156 million pre-hack to under $600,000, according to DefiLlama data.
Fewer than half of all DeFi protocols that suffer a hack or exploit survive the experience, but Conic appeared to buck the trend after releasing a new version of the protocol.
That version attracted more than $30 million in crypto deposits at the beginning of 2024, according to DefiLlama data. But those deposits slowly dwindled, stabilising around $5 million.
Conic’s remaining developers have disabled deposits and shut down the protocol’s so-called omnipools.
Users previously deposited tokens to omnipools, which then programmatically allocated those tokens across different Curve pools.
Curve founder Michael Egorov invested $1 million in Conic Finance after the hacks. Conic’s developers said they will return unused funds to Egorov.
Disclaimer: The two co-founders of DL News were previously core contributors to the Curve protocol.
Aleks Gilbert is DL News’ New York-based DeFi correspondent. You can reach him at [email protected].
