Solana Tokenized Silver Project Dominion Announces Closure
The Solana tokenized silver project Dominion has announced its closure. The team stated that a security incident in September led to a large amount of SILV being compromised and sold off, resulting in a collapse of liquidity, operational capital losses, and damage to market structure. The capital required for reconstruction has exceeded the remaining resources.
The project has allocated most of the remaining liquid funds for refunds. Eligible SILV holders before the attack can exit at $63 per coin. The claims window opened on September 28 and was settled in USDC at the same price, provided the holders maintained their positions before the attack, and closed on October 5. The price of SILV was approximately $63 the night before the attack.
SILV was designed to be backed 1:1 by physical silver, with each coin corresponding to one troy ounce. The treasury requires 3 out of 5 signatures for access. On September 11, the attacker controlled 3 keys, emptied the treasury, and withdrew more SILV from the borrowed positions in the stolen wallet.
The attacker sold approximately 46,909 SILV on a thinly traded decentralized exchange, about half of the existing supply. The nominal value before the attack was around $3 million, and the final cash-out was about $238,000. The team changed the signers before 06:19 UTC, and at 10:51 UTC, the attacker acted again using a wallet that had not been covered by the rotation.
The team determined that the cause was social engineering disguised as investors and lurking malware, which drained both personal and project wallets, while minting rights were not taken away. SILV purchased between 01:00 and 14:00 UTC that day was removed from wallets, and the project froze 2,819 accounts, accounting for about 33% of the supply. The team contacted the Solana incident response network and SEAL 911, and reported to IC3.
The buyers were pre-attack holders exiting at $63, while the sellers were the project team that had no operational funds left. The incident was driven by controlled multi-signature, with funds moving from the market-making inventory to refunds. Beneficiaries were old holders who could claim based on snapshots, while those under pressure were addresses that bought during the attack window, thin pool market makers, and traders still treating on-chain silver as redeemable inventory.
Source: Public Information
ABAB AI Insight
The Dominion account was established in December 2025, with the selling point being one coin per ounce on Solana. Before September 11, it also used programs to repurchase based on silver prices, allowing arbitrageurs to buy low-priced SILV in thin pools and exchange it for about $63 USDC. After the multi-signature was controlled, this repurchase loop handed its operational funds over to the selling pressure post-attack.
The capital path stops at refunds, not at replenishing the pool. The project did not redo contracts and exited the remaining liquid funds based on pre-attack snapshots at $63 per coin. The attacker sold 46,909 coins for about $238,000, with losses incurred in pool slippage, not in the silver treasury. Social engineering combined with malware took 3 out of 5 keys, minting rights remained, but the market structure was gone.
A comparison can be made to Cashio in 2022, which used infinite minting to penetrate Solana's stablecoin, and Pax Gold and Tether Gold, which store inventory in licensed custody rather than project multi-signatures. Dominion is in the early experimental stage of physically backed tokens, with redemption commitments tied to the team wallet, not an exchange treasury.
This represents a transfer of pricing power. Silver spot prices are still set in London, while the redeemable price of SILV is determined by multi-signature and pool depth. With 3 keys able to push half the supply into a thin pool, the 1:1 backing only exists in snapshots. The closure signifies an acknowledgment that the remaining capital cannot buy back the reputation lost to slippage.
ABAB News · Cognitive Law
The premise for 1:1 to hold is that the keys do not belong to the attacker.
The nominal value in a thin pool cannot be converted into cash-out amounts.
The refund price is based on snapshots, not the post-reconstruction market.