Babylon Finance will discontinue protocol after a $3.4 million loss due to a Rari breach
Due to a shortage of operating money, Babylon Finance plans to shut down its decentralized asset management service in November.
The Bablyon team claims it has been unable to reverse the “bad momentum” produced by the April Rari breach, in which $3.4 million were stolen.
Decentralized asset management protocol Babylon Finance has declared that the project would cease operations in November, citing its inability to recoup from a $3.4 million hack on a loan business it launched on Rari Capital.
The project was terminated because the team ran out of finances to cover expenditures, according to the creator of Babylon.
Recuero said, “For the last several months, the staff has been working without pay in an effort to get back on pace with our former TVL [total value locked] growth.” “Our greatest error was insufficient fundraising,” he remarked.
The Rari relationship
Babylon Finance is characterized as a decentralized framework for asset management in which a community of users may make investment choices collectively. However, Babylon’s operations were reliant on the Rari Capital decentralized finance (DeFi) infrastructure. Babylon used Rari Capital’s infrastructure to establish Fuse lending marketplaces.
The Babylon team established lending markets on Rari Capital’s Fuse platform in February, requiring users to deposit BABL tokens as collateral and borrow assets from it. In all, Babylon handled $10 million worth of assets.
In April, more than $80 million in crypto assets housed inside the Fuse lending pools were stolen from Rari Capital. Babylon was one of the DeFi projects that used Rari’s infrastructure and owned these assets.
During the event, the Babylon team lost assets worth $3.41 million. The event caused consumers to withdraw further collateral, causing Babylon’s assets under management to decrease from $30 million to $4 million in the days that followed.
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