Hats.finance announces gradual termination of custodial operation services, stating that the market size has not grown as expected and its share has been eroded by AI security tools.

BlockBeats News, December 1, according to official sources, Hats.finance has announced that it will gradually terminate its custodial operation services.

Hats.finance stated that after careful evaluation, it has realized that it is no longer sustainable to maintain a centralized user interface and server operations, and currently there are no new legal or operational frameworks planned to continue the current custodial technology stack. Since 2021, Hats.finance has always pursued the philosophy that "a decentralized market should have decentralized security guarantees."

However, reality has not matched the initial expectations. The smart contract security budget has not grown in tandem with the expansion of DeFi as anticipated. Meanwhile, the rapid advancement of AI security tools and the increasing maturity of secure, reusable smart contract building modules have reduced the market demand for protocols like Hats, resulting in the HATS token struggling to maintain long-term effective value support.

In the future, the Hats.finance custodial frontend and backend (user interface and server) are expected to go offline on December 31, 2025. Most functions relying on this custodial technology stack will be gradually discontinued. The Hats protocol itself will remain deployed on-chain and governed by the DAO. The core contracts are designed to continue operating according to their code logic. If you wish to withdraw funds through the custodial user interface, the official recommendation is to initiate a withdrawal request before December 17, 2025 (a 7-day cooling-off period plus a 7-day withdrawal window is required).