DeFi Lending Protocol zkLend Shuts Down After $9.5M Exploit, Token Delisting

zkLend, a once-promising decentralized finance (DeFi) lending platform on StarkNet, is shutting down after a series of devastating setbacks, most notably a $9.5 million exploit in February 2025 and the subsequent delisting of its native token, Zend, from major centralized exchanges like Bybit and KuCoin.

“It is with a heavy heart that we announce our decision to wind down zkLend,” the protocol’s team stated in a message posted on Wednesday.

Dear zkLend Community,

It is with a heavy heart that we announce our decision to wind down zkLend.

This decision was not made lightly. Over recent months, the exploit we suffered has deeply eroded user confidence, and furthermore, the recent removal of ZEND from major exchanges…

— zkLend (@zkLend) June 25, 2025

The exploit, caused by a rounding error vulnerability in one of zkLend’s smart contracts, siphoned off millions in user funds and marked the beginning of a rapid unraveling for the project. Despite attempts to negotiate with the attacker, including a proposed 10% bounty offer, zkLend was unable to recover the stolen funds. In an unexpected twist, the attacker later claimed to have fallen victim to a Tornado Cash scam, compounding the platform’s woes.

In the aftermath, privacy protocol Railgun publicly refused to facilitate the laundering of the stolen assets, a rare show of ethics in a space often criticized for opacity. Yet even this principled stand could not rescue zkLend from its downward spiral.

At its peak, zkLend boasted a total value locked (TVL) of nearly $56 billion, making it one of the flagship DeFi money market platforms on StarkNet. Its collapse underscores a broader crisis in the DeFi sector, which has already seen over $2 billion stolen by hackers and exploiters in 2025 alone — a nearly 50% jump from the previous year, according to DeFiLlama.

DeFi’s harsh reality has shown little mercy to struggling protocols. In March, Conic Finance also shuttered after being hit twice by exploits. Others, like Alpaca Finance, folded not due to hacks, but because of lackluster adoption and product-market fit.

zkLend’s remaining treasury, estimated at around $200,000, will be used to support affected users. The platform’s frontend will remain operational to allow asset withdrawals, but no further development is planned.

Editorial Note: This news article has been written with assistance from AI. Edited & fact-checked by the Editorial Team.

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