Hats.finance announced that it will gradually terminate its custodial operation services. The official stated that the market size has not risen as expected and that the share is being eroded by AI Security tools.

On December 1, according to official news, Hats.finance announced that it will gradually terminate its custody operation services. Hats.finance stated that after careful evaluation, it has realized that continuing to maintain a centralized user interface and server operations is unsustainable, and there are currently no new legal or operational frameworks planned to continue the current custody technology stack. Since 2021, Hats.finance has been pursuing the idea that 'a decentralized market should have decentralized security guarantees.' However, reality has not matched the initial vision. The security budget for smart contracts has not increased in line with the growth of DeFi as expected. Meanwhile, the rapid advancement of AI security tools and the increasing maturity of secure, reusable smart contract building modules have reduced market demand for protocols like Hats, making it difficult for the HATS Token to maintain long-term effective value support. In the future, the custody front-end and back-end (user interface and server) of Hats.finance are expected to go offline on December 31, 2025. Most functions relying on this custody technology stack will gradually cease operations. The Hats protocol itself remains deployed on-chain and is governed by DAO. The core contract is designed to continue operating according to its code logic. If you wish to withdraw funds through the custody user interface, the official recommendation is to initiate withdrawal requests before December 17, 2025 (after a 7-day cooling period plus a 7-day withdrawal window).