- Dominion has officially closed its Solana-based tokenized silver project due to an irreversible loss of capital and market damage.
- Though the tokens had a nominal value of $3 million, the attackers only realized $238,000 due to low pool liquidity.
- A recovery fund has been set up to offer eligible pre-attack holders a fixed refund rate of $63 per token.
Dominion, a Solana-based tokenized silver project, announced its permanent closure on Wednesday, 7th October. According to the shared X post on the matter, the decision follows a severe security breach in September that triggered massive liquidity loss, loss of working capital, and damage to the market structure, from which the project failed to make a sustainable recovery.
The September Exploit That Drained $3M Worth of Tokens
On September 11, 2026, the malicious actors successfully executed a private key exploit that targeted Dominion’s treasury wallet. The project’s native SILV token was originally structured as a stable commodity token pegged 1:1 with physical silver, where each token represented one troy ounce of the precious metal.
According to blockchain data from Bitquery Research and security firm Slowmist, the hacker managed to gain control of three out of the five project’s multi-signature wallets. Armed with majority control, the attacker drained Domion’s treasury and stole 46,900 SILV tokens worth approximately $3 million.
As the exploit moved the stolen SILV token to a decentralized exchange (DEX) of thin liquidity, the sudden influx of sell orders broke the asset’s silver peg and shattered the token’s market structure. The illiquid exchange created higher slippage for the transaction, and attackers were able to cash out approximately $238,000, causing SILV to plunge by 74%.
Dominion Announced Permanent Closure due to Liquidity Death Spiral
In the immediate aftermath of the attack, Dominion’s team rushed to execute an emergency freeze to affect liquidity pools and replace the compromised wallet with fresh devices and new hardware wallets. However, the damage to the SILV structure and investors’ confidence was already done.
Today, the official X page posted the “closure of Dominion.”
“We started Dominion with a simple belief: silver belongs on chain. We believed tokenization could make one of the world’s oldest monetary assets more accessible, liquid and composable, and that Solana was the right place to build it,” the post highlighted.
The security breach led to a significant amount of SILV being compromised and sold into the market. The resulting liquidity collapse, loss of working capital, and damage to the market structure left Domino in a position that ultimately led to a decision to shut down their operation.
The Silver Lining: Refund Program Activated
The team realized that the amount of capital needed to completely rebuild the network is more than the project had left in its fund and thus directed their efforts towards the investors compensation framework.
Eligible SILV investors, those who owned the asset before the September 11 attack are being offered an exit refund rate of $63 per token. This is in line with the steady nominal value of this asset just hours prior to the exploit.
A Wake-Up Call for the RWA Sector
The collapse of Dominion underscores an emerging discussion on the risks associated with Real-World Asset (RWA) tokenizations. According to an industry report, the investigation of 32 different RWAs on Solana after the SILV incident found that all of them have built-in issuer controls that can be used to freeze or withdraw tokens during crisis situations.
Although these centralized “clawback” permissions are legally mandated for regulatory compliance, the Dominion saga is a sobering reminder to Web3 investors: even the most traditional and compliant assets are 100% exposed to standard DeFi risks, including smart contract bugs, thin DEX liquidity pools, and private key mismanagement.
Their closing statement was “Dominion won’t be the final attempt to bring silver fully onchain. We hope the lessons from what we built – and from where we failed – help those who continue that mission.’
