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Babylon Finance Shutters Operations After $80M Rari Hack: ‘We Have Failed and We Need to Accept It’

Catherine Ross-Mychkan - BeInCrypto
2022-09-02 03:08
Non-custodial asset management protocol Babylon Finance is closing down operations following the attack that led to an $80 million theft.
“Despite our efforts, we haven’t been able to revert the negative momentum caused by the Rari/FEI hack,” the Founder Ramon Recuero shared on Medium.
Babylon is an Ethereum (ETH)-based protocol that allows users to create investment communities called gardens and offers yield earnings.
Recuero then explained what actions the company plans to take to cease the operations and return funds to the users. They include returning both vested and unvested tokens, extracting all the liquidity from the Uniswap pool, consolidating all remaining treasury holdings, and distributing them amongst BABL and hBABL holders.
2/ How the Rari hack affected us– 6 gardens invested in Rari and lost 3.4M in the hack.– TVL decreased from $30 to $4M.– Fuse was abandoned. Our $10M lending market is gone.– BABL decreased from $20 to $6.– Team also lost months of runway.
— Ramon Recuero | (@ramonrecuero) August 31, 2022
Creating more gardens will no longer be possible, and the team also says that they will continue working until all the funds that were in the gardens at the time of the hack are reimbursed.
“We believe the responsible and moral thing to do is to wind down the DAO and return all remaining assets to BABL and hBABL holders,” Recuero continued.
The Founder also said that the team has been working without salary, trying to get back on track to the previous total value locked (TVL) growth. “We couldn’t get there,” he admitted.
All operations, including the official site and Babylon’s Discord, will be shut down on Nov. 15.
In April, Babylon’s Rari Capital, which earlier merged with Fei Protocol, suffered an $80 million hack. The bad actors exploited a reentrancy vulnerability in Rari’s Fuse lending protocol, the same vulnerability which was used in the Compound DeFi protocol attacks.
To remedy the situation, the company offered a $10 million bounty if the hacker returned the rest of the funds, “no question asked.”
Before the Rari hack, the project was able to reach 30 million in TVL and had 1,500 depositors.
Babylon was launched in 2021 by a team with experience working at Google, Y Combinator, Telefonica, and OpenZeppelin.
The platform raised $1.9 million from investors, including Harvest Finance, Meltem Demirors, Defi Alliance, Joseph Young, and others. The company positioned itself as “the first decentralized asset management protocol where deposits are owned and led by the community.”
Babylon Finance (BABL) token plummeted by 95% following the announcement.
The post Babylon Finance Shutters Operations After $80M Rari Hack: ‘We Have Failed and We Need to Accept It’ appeared first on BeInCrypto.
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