Babylon Finance announces it is winding down and terminating its protocol
The reason for the collapse was an attack on the Rari Capital project, which affected the liquidity pools associated with the BABL token
Customers will be able to withdraw funds until 15 November 2022
Babylon Finance’s management has announced an imminent shutdown. The protocol has failed to recover from the cyber-attack on DeFi project Rari Capital, which affected the BABL token.
According to the company, the decision to shut down the platform was made after Rari Capital refused to reimburse customers for losses. In the case of Babylon Finance, the loss exceeded $3.4 million. In addition, immediately after the attack, users of the protocol withdrew 75% of assets.
The attack on Rari Capital took place on April 30. The attackers hacked the platform and withdrew over $80 million. As one third of BABL tokens were stored in the project pools, the attack had unfortunate consequences, which triggered a total collapse of TVL Babylon Capital.
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.
🧵 TLDR below
- Ramon Recuero | 🦇🔊 (@ramonrecuero) August 31, 2022
Protocol management has tried to recover the amount of blocked assets at the expense of fees. For example, the management fee is equal to 0.5% of AUM (volume of assets under management). Also Babylon Finance charges so-called success fee of 5% of income on transactions.
Such manipulations had no positive effect and all attempts of the team to restore TVL failed. The news of Babylon Finance’s termination was a kind of “nail in the coffin” of the protocol. Immediately after the announcement was published, the BABL token plummeted 92%.
Users will be able to withdraw funds until 15 November. The company will provide an update on the termination of the protocol by 4 September.