Decentralized finance (DeFi) protocol called Babylon Finance is shutting down its operations, as it has initiated the process of distributing its treasury holdings.
Meanwhile, the founder of the DeFi project shared some lessons that contributed to the protocol winding down.
Based on Ethereum, it was essentially an asset management platform that earned yield by sourcing investment strategies from its community members.
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For instance, anyone who had an idea of making money in the crypto market could use Babylon which could help in raising capital and executing the said idea.
The founder’s opinion
Even though there are a number of reasons why Babylon Finance is winding down, Ramon Recuero, the founder of the protocol was quick to highlight the hack that it had suffered back in April.
He stated that the Rari Capital hack that occurred had acted like the domino that resulted in a series of unfortunate events for Babylon Finance.
The protocol will shutter its website and Discord channel on November 15th. The total money comprised in the hack was $80 million, out of which Recuero’s losses were close to $3.4 million.
This cost Babylon Finance’s teams operating costs about three months and ate up a significant amount of the total value locked (TVL) of the platform.
In addition, the hack also meant that the Rari’s Fuse pools were no longer accessible for Babylon. These pools were previously used for creating borrowing and lending pools for any kind of asset.
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Essentially, it meant that the platform’s native token called BABL could no longer be used as collateral in order to borrow funds.
Recuero stated that these were the events that resulted in burnout for the platform.
He said that coping up with the bear market, dealing with different crises and eventually, the Fuse hack put too much pressure on the team.
He also said that people had gotten immensely angry, even though they were not to blame for the hack.
Now that Babylon Finance is winding down, the remaining treasury holdings of the project will be distributed amongst the holders of the BABL token, along with the staked version of the token called hBABL.
It is expected that the distribution of these holdings would begin on September 6th. The founding team will not receive any of the funds, or the tokens for that matter.
Recuero said that they had failed and had to accept it. He stated that when a project or startup fails, the founders should not expect to receive anything.
However, whether users will get the funds they lost in the Rari hack remains to be seen. There was a recent debacle of TribeDAO governance that had first agreed to reimburse the victims.
But, it ended up flipping entirely. TribeDAO was founded last year in November via a merger between stablecoin project Fei and Rari Capital.
Recuero stated that had they not gone back on their promise, this situation wouldn’t be happening. If reimbursement is given, Babylon Finance will make sure its users also receive their funds.