Sep 01, 2022 Camille A. Hanard
According to an announcement published yesterday, DeFi asset management platform, Babylon Finance will close its services on November 15, as the project hasn’t been able to rebound after the crisis caused by April’s Rari Capital $80 million exploit. Rari Capital allows individuals and teams to create Fuse pools, enabling users to deposit assets into these pools and earn yield. Prior to the hacking incident, Babylon Finance managed to reach a TVL of $30 million, created a top 10 lending pool on Rari with $10 million worth of liquidity in it, and acquired 1.5k depositors.
Nevertheless, Babylon Finance lost $3.4 million during the exploit, resulting in the withdrawal of nearly $14 million worth of users' assets within two days - constituting 75% of its TVL. On top of that, Babylon’s native BABL token price dropped from $20 to $5, removing any possibility of fundraising future activities from token sales, as the token supply was limited. Meanwhile, Rari Capital canceled its reimbursement plan for users affected by the exploit. The team also announced its plans to consolidate all remaining treasury holdings and distribute them amongst $BABL and $hBABL holders starting from September 6.
In the meantime, Babylon Finance has removed most of the liquidity from its Uniswap v3 pool “to prevent insiders from trading around the expected liquidation price and drain all the existing liquidity”. As of the time of this writing, the BABL lost about 92% of its value within the past 24 hours.