Babylon Finance Shtting Down

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Babylon Finance, a cryptocurrency asset manager, will shut shop after failing to recover from the Rari hack

Babylon Finance Shtting Down
Babylon Finance Shtting Down / Image Credit: CRYPKYP
Source: CoinDesk
1662024859 01 Sep / 09:34

Babylon Finance, an Ethereum-based asset management platform, will completely cease in November after failing to recover from the effects of the April $80 million Rari Capital attack.

Rari enabled users to supply and borrow any asset from its Fuse pools to generate yields. Users can create their pools with a selection of Ethereum-based assets, such as the tokens from Babylon, and other users can contribute money to those pools to receive yields. As compensation for trading activity on those liquidity pools, yields are produced.

At its peak, Babylon held $30 million in different cryptocurrencies and was one of the top lending pools on Rari, with $10 million in user-supplied assets. Users that used the Babylon protocol's native BABL tokens as collateral for loans on the site had to pay a 0.5% maintenance charge and a 5% performance fee.

However, according to Babylon creator Ramon Recuero, things deteriorated after Rari canceled a promised refund to users affected by the exploit.

During the Rari exploit, Babylon lost $3.4 million, and its users withdrew more than 75% of their assets at the time.

Therefore, the goal of the Babylon team was to accumulate $50 million in user-supplied assets. It would become financially viable thanks to customers’ fees in exchange for the yields. Babylon’s sustainability as a protocol reached “the point of no return” as a result of the Rari exploit and a sharp decline in BABL token prices, it was claimed.

Recuero continued, “Token price dropped from $20 to $5.” “Taking away all potential future fundraising opportunities from token sales. Only 10% of the total token supply, limited and not inflationary, is still in the Treasury.

Recuero stated that the company would hand over all remaining assets, including all tokens vesting to the founders, to BABL holders in the upcoming weeks.

As traders responded to the news, prices for BABL dropped 92% during the previous 24 hours, according to statistics.

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