Babylon Finance protocol to shut down due to attack on Rari Capital's DeFi project that hit several liquidity pools involving the BABL token .
Babylon Finance is shutting down
– Details on the claim process will be shared by the end of this week
– Withdraw your funds before Nov 15thhttps://t.co/dICvgxpDUF
— Babylon Finance (@BabylonFinance) August 31, 2022
Clients have been advised to withdraw funds by November 15th. The team will return the remaining assets in the coming weeks. More information will be provided by management through September 4.
The decision comes after Rari canceled a scheduled refund to users affected by the attack.
Babylon Finance suffered $3.4 million in damage over the following days its users have withdrawn over 75% of their assets.
“The Rari exploit […] has led to a 'point of no return' for Babylon as a sustainable protocol. […] The price of BABL fell from $20 to $5, making it impossible to raise funds. The supply of tokens is limited, not subject to inflation. Only 10% remains in the treasury,” – the message says.
The project team sought to restore TVL at the expense of commissions from users.
Babylon Finance's management fee is 0.5% of AUM. The protocol also charges a success fee of 5% of revenue from operations where user-provided BABL served as collateral.
To continue operations, the TVL must be at least $50 million, the team noted.
Rari Capital was hacked on April 30th. The attacker withdrew $80 million that was stored in his Fuse credit pools. Users could create their own variants of ERC-20 token baskets, including those involving BABL.
At its peak, TVL Babylon Finance reached $30 million. Before the incident, about 1,500 users contributed BABL tokens with a total value of $10 to Rari Capital pools million. This allowed the asset to enter the top 10 of the project.
The market reacted nervously to the message of the project team. According to CoinGecko, over the past 24 hours, BABL has fallen in price by 92%, to $0.403.
Recall that in the first half of the year, hackers stole assets worth $1.97 billion from crypto projects.
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