Hats.finance has announced the gradual discontinuation of its custodial operation services, citing the market size not growing as expected and the share being eroded by AI security tools.

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

Hats.finance stated that, after careful evaluation, it has recognized that continuing to maintain a centralized user interface and server operation is unsustainable. Currently, there is no new legal or operational framework plan to continue the current custodial technology stack. Since 2021, Hats.finance has always pursued the idea that "a decentralized market should have decentralized security."

However, reality has not aligned with the initial vision. Smart contract security budgets have not grown in sync with the expansion of DeFi as expected. Meanwhile, the rapid advancement of AI security tools, as well as the increasing maturity of secure, reusable smart contract building blocks, have reduced the market's demand for protocols like Hats, making it difficult for the HATS token to maintain long-term sustainable value support.

In the future, Hats.finance's 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 gradually cease operations. The Hats protocol itself is still deployed on-chain and governed by a DAO. The core contract is designed to continue running according to its code logic. If you wish to withdraw funds through the custodial user interface, it is recommended to initiate a withdrawal request by December 17, 2025 (requiring a 7-day cooldown period plus a 7-day withdrawal window).