The decentralized security project Hats Finance recently dropped a bombshell – it announced that it will officially cease operations of its centralized frontend and servers on December 31 of this year.

The reasons behind this matter are quite realistic. The team pointed out three fatal issues: first, the growth of the budget for smart contract security is far from meeting expectations; second, AI security tools have made significant progress in the past two years, taking away a considerable amount of work from traditional security audits; finally, reusable contract components are becoming more mature, allowing project teams to solve many security issues on their own.

These factors combined have directly led to a sustained weakness in market demand for HATS tokens and the protocol, which cannot support the costs of long-term operations. However, that being said, the protocol itself will not disappear and will remain on the chain in the form of smart contracts, to be managed by the DAO in the future.

In simple terms, this is another case of a DeFi project actively seeking survival in response to changes in the market environment. The rules of the game in the security track have changed; traditional models cannot keep up with the pace, and they either need to transform or exit.