Babylon Finance to shutter protocol after losing $3.4 million in Rari hack

Quick Take

  • Babylon Finance is planning to close its decentralized asset management service in November due to lack of funds for operations.
  • The Bablyon team says it has failed to reverse the “negative momentum” caused by losing $3.4 million in April’s Rari hack.

Decentralized asset management protocol Babylon Finance announced the project is shutting down in November, citing its failure to recover from a $3.4 million exploit on a lending service it launched on Rari Capital.

“Despite our efforts, we haven’t been able to revert the negative momentum caused by the Rari hack. Market hasn't helped,” Babylon founder Ramon Recuero said on Twitter on Wednesday.

Babylon's founder added the team had run out of funds needed for expenses, forcing it to shutter the project altogether.

“For the last few months, the team has been working without a salary trying to find ways to get back on track with our previous TVL [total value locked] growth,” Recuero said. “Our biggest mistake was not raising enough money,” he added.

The Rari connection

Babylon Finance is described as a decentralized asset management protocol in which a community of users can make collective investment decisions. However, Babylon’s operations were dependent on another decentralized finance (DeFi) platform called Rari Capital. Babylon used Rari Capital's infrastructure to create lending markets called Fuse.

In February, the Babylon team launched lending markets on Rari Capital’s Fuse platform, where it had asked users to deposit BABL tokens as collateral and borrow assets from it. Babylon managed $10 million of assets across these pools.

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