The project’s founder Ramon Recuero explained that the developers failed to “revert the negative momentum” caused by the hack of the Rari Capital platform

BABL collapsed by 95,5% following Babylon Finance announcing the cease of operations

02.09.2022 - 07:15

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2 min

What’s new? On September 1, the rate of BABL, the native token of Babylon Finance, a DeFi protocol, collapsed from $5,2 to $0,23, following the announcement that the platform was shut down. The project’s founder Ramon Recuero explained that the developers failed to “revert the negative momentum” caused by the April 30 hack of Rari Capital’s DeFi platform. Back then, attackers managed to withdraw $80 million, Babylon’s loss was $3,4 million. As of September 2, 07:10 UTC, the BABL token is trading at $0,4, having gained 0,6% in 24 hours, according to CoinGecko.

Recuero’s Blog

What else did Recuero write? The process of distributing the remaining assets from Babylon’s treasury to BABL and hBABL token holders will be starting from September 6. Compensation will also be paid to investors who held funds at the time of the hack. The platform’s team has advised customers to withdraw funds by November 15.

At Babylon Finance, funds are owned and governed by the community. The management fee is 0,5% of assets under management (AUM). Babylon’s total value locked (TVL) reached $30 million at its peak. After Rari was hacked, users withdrew 75% of their assets from the platform. The developers noted that TVL should be at least $50 million to continue activities.

Babylon is a community-led asset management protocol that allows users to co-invest in DeFi. The platform is powered by Ethereum.

In August, the FBI issued a warning to investors about vulnerabilities in DeFi platforms. Representatives of the bureau urged citizens to carefully study platforms, protocols, and smart contracts before investing. The FBI also cited data from analysts at Chainalysis that showed criminals stole $1,3 billion in cryptocurrency in Q1 2022, and 97% of that amount was stolen from DeFi platforms.

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