DeFi asset management protocol Babylon Finance shocks the community as its founder Ramon Recuero announced that it is shutting down its services on November 15, 2022, after failing to recover from the repercussions of the Rari hack.
Babylon Finance’s farewell announcement noted, “Despite our efforts, we haven’t been able to revert the negative momentum caused by the Rari/FEI hack.”
The protocol was in a better position prior to the Rari/FEI hack because it had established a top 10 lending pool on Rari and attained a total value of $30 million.
The Rari/FEI exploit caused its investment gardens to lose $3.4 million, and within two days, its customers withdrew 75%, or around $14 million, of its TVL.
Rari/FEI was compelled to reprice the Rari assets to zero after deciding to discontinue its reimbursement arrangements.
The BABL token price plummeted from $20 to $5, eliminating any chance of further fundraising through token sales. Only 10% of the total token production, constrained and not inflationary, is still in the Treasury.
The crew had a challenging time coping with the bear market, several crises, and finally the fallout from the Fuse hack.
The Babylon Finance team disclosed that beginning on September 6, it would pool all of its Treasury assets and distribute them to BABL and hBABL holders.
Additionally, users of Babylon Finance must withdraw their money prior to November 15, when the website will be shut down. In order to prevent liquidity from draining during the liquidation process, Babylon has eliminated all available liquidity from its Uniswap v3 pool.
“All the code is open-sourced and the community is welcome to fork/clone and build on top of the Babylon project and/or token,” the statement notes.
Following the shutting down statement, the BABL token price fell by almost 90% in the past 24 hours. BABL token’s value fell from above $5 to as little as $0.402313 at the time of writing.
“Having reached this point, we believe the responsible and moral thing to do is to wind down the DAO and return all remaining assets to BABL and hBABL holders,” Recuero noted.
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