FTX-backed DEX Serum calls itself 'defunct,' promotes community fork

Serum, a decentralized crypto exchange backed by FTX, notified its 215,000 Twitter followers the project is “defunct” after the crypto exchange giant's sudden collapse — while pointing users towards a community-led fork of the project. 

"The Serum program on mainnet became defunct" following FTX's implosion, Serum tweeted. "As upgrade authority is held by FTX, security is in jeopardy, leading to protocols like Jupiter and Radium moving away,” it added, referring to two DeFi projects on the Solana blockchain.

Earlier this month, the now-bankrupt FTX exchange was hacked for more than $400 million, which is said to have compromised the security of Serum’s code. This is because the “update authority” for its code was held solely in the hands of insiders at the FTX exchange, Serum explained. 

The team also commented on its native Serum (SRM) token, stating its future was "uncertain" and that developers have proposed to scrap its use due to exposure to FTX and its sister trading firm Alameda Research.

However, Serum also flagged growth at a community-led fork of the protocol called OpenBook, which has gone live on Solana. OpenBook is processing a daily volume of over $1 million whereas the volume and liquidity for Serum has now dropped to near-zero, Serum noted.

"With Openbook's existence Serum's volume and liquidity has dropped to near-zero. Users and protocols are safe using an alternative fork such as OpenBook, after finding out security risks on the old Serum code," the team said.

As the hack came to light, Serum’s code could not be securely updated in time to deal with potential vulnerabilities. In response, Solana co-founder Anatoly Yakovenko, along with other developers, suggested forking its code. The fork was led by Mango Max, who also serves as the developer at the lending project Mango Markets.