DeFi Lending Protocol Radiant Capital Plans Gradual Shutdown
DeFi lending protocol Radiant Capital announced that it plans to gradually shut down operations due to an inability to recover from an attack in 2024 that resulted in losses of approximately $50 million, and failure to raise new funds. The DAO has no viable path forward.
In October 2024, the protocol suffered a backdoor contract attack on Arbitrum and BNB Chain, resulting in losses of about $51 million, following a flash loan attack earlier in the year that caused losses of approximately $4.5 million.
Market Mechanism: Radiant users, acting as primary sellers, accelerated withdrawals, with funds flowing from the compromised protocol to other DeFi platforms. Radiant Capital faces a risk of total loss, while competing lending protocols benefit from user migration, impacting overall DeFi trust due to the failure of a single project.
Supplementary Data: The protocol will enter maintenance mode, keeping the frontend and contracts online, allowing users to continue withdrawals, repayments, and position management. The team will continue to recover funds.
Source: Public Information
ABAB AI Insight
Radiant Capital has rapidly grown to become one of the main lending protocols on Arbitrum since its launch in 2022, but multiple security incidents have exposed weaknesses in its contract audits and governance. This shutdown continues its trajectory from a high TVL project to a failure case, with earlier flash loan attacks highlighting weak risk control.
On the capital front, after the $51 million loss, Radiant attempted DAO financing multiple times but failed. The motivation was to maintain operations through community efforts, but due to a broken funding chain, it could not recover assets, ultimately choosing a maintenance mode to minimize further losses and protect remaining users' withdrawal rights.
Similar to several DeFi projects (like Euler and Beanstalk) that gradually declined after attacks between 2022 and 2024, Radiant is currently in a reshuffling phase in the DeFi lending sector, transitioning from wild growth to high-security thresholds, significantly increasing survival pressure on small and medium protocols.
Structural Judgment: Essentially, this belongs to capital concentration. Continuous attacks and financing failures accelerate the exit of small and medium DeFi protocols, concentrating capital towards leading lending platforms (like Aave and Morpho). Through user migration and TVL redistribution, pricing power shifts from decentralized innovative projects to a few safe and reliable platforms, with the mechanism being that security incidents amplify the winner-takes-all effect in DeFi.
ABAB News · Cognitive Law
One attack can be recovered from; after two attacks, financing becomes a luxury.
The death of DeFi is often not due to hackers, but the subsequent depletion of funds.
Security is not a cost, but the true ticket for sustained operations.