DeFi asset management protocol Babylon Finance will shut down its services on November 15. Behind this decision, there is a hack that took place on the platform. Meanwhile, the platform’s altcoin project has lost over 90 percent of its value. Here are the details…
Babylon Finance deeply affected by Rari/FEI hack
Babylon Finance will shut down its services on November 15, according to founder Ramon Recuero’s statement on August 31. The announcement revealed that the protocol has not been able to recover after the $80 million hack Rari/FEI and current market conditions make it difficult to return. Prior to the Rari/FEI attack, the protocol had reached a total value of $30 million. It was also in a relatively strong position as it created a top 10 loan pool in Rari.
1/ Babylon Finance is Shutting Down
Despite our efforts, we haven’t been able to revert the negative momentum caused by the Rari hack. 🐻 Market hasn't helped.https://t.co/Qgb5XM33ZX
🧵 TLDR below
— Ramon Recuero | 🦇🔊 (@ramonrecuero) August 31, 2022
However, the Rari/FEI exploit caused the pools to lose $3.4 million. Users of the platform have withdrawn 75 percent of the total locked value (about $14 million) in two days. Rari/FEI’s decision to cancel repayment plans forced the platform to reprice Rari assets to zero. Fuse continued that the $10 million lending market on Rari was abandoned as its native token BABL can no longer be used as collateral for borrowing. “The hack eroded our cash positions, our access to funding, and most importantly, user trust,” Babel Finance said.
What’s next for Babylon Finance users?
The Babylon Finance team announced that it will consolidate all treasury assets and distribute them between BABL and hBABL holders from 6 September. Babylon Finance users also need to withdraw their funds before November 15, when the website will be shut down. Meanwhile, the protocol removed all available liquidity from the Uniswap v3 pool to avoid clogging during the liquidation process.
Altcoin price crashes
Babylon Finance’s BABL token has dropped more than 92 percent in the last 24 hours after the announcement. According to the data, the value of the token has dropped from $5.21 to $0.44. OpenSea data also showed that Babylon Prophets, the asset management protocol’s NFT collection, has crashed in the past three months. According to the data, the last sale in the collection was for Prophet #629, which was sold on August 6 for 0.008 ETH ($12). You can see a daily price chart for the cryptocurrency as follows:
cryptocoin.com As we reported, the BABL token continued to decline after the hacking process. It lost more than 90 percent of its value in that time and fell from $20 to $5. According to the announcement, the collapse eliminated the possibility of any future fundraising activity as “the token supply is limited, non-inflationary, and only 10 percent remains in the treasury.” It was also revealed that the team has been unpaid since the Rari/FEI attack took place.
