Cryptocurrency plummets 99% after project ends service

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A cryptocurrency has plummeted 99% in the last few hours after a DeFi service associated with it shuts down. This is yet another collapse of a decentralized ecosystem in recent months.

Between 2021 and 2021 ), with a booming cryptocurrency market, many novelties have emerged in the ecosystem, such as the so-called DeFi.

With the translation of Decentralized Finance, the platforms emerged as a promise to create banking solutions with cryptocurrencies, without necessarily using traditional systems.

DeFi projects attracted many clients interested in lending cryptocurrencies and earning income, among other opportunities that emerged on the platforms.

However, platform risks also prove to be a challenge for the sector’s sustainable growth.

Cryptocurrency plummets 99% after DeFi ends its services

One of the saddest cases in recent months happened to Babylon Finance customers, a platform that presented itself as an “investment club” for investments in cryptocurrencies.

Providing simple solutions for its investors, the platform turned out not to be a completely safe environment, since, in April 2022, Rari Fuse’s liquidity pools were the target of a hack and immediately impacted Babylon Finance.

There were more than millions of dollars stolen in this episode, part being from Babylon clubs . With a falling market, the recovery of the project proved impossible.

On the day 31 of August, Babylon Finance announced its end, a project that was launched in February 2022 and did not last many months to impact the market.

With the DeFi service willing to terminate its services, the project’s cryptocurrency plummets 99% since its all-time high in the market, in December 2021, being the worst drop seen since the day 31 of last August.

#PeckShieldAlert $BABL has dropped -95% after the shutting down announcement. @BabylonFinance

— PeckShieldAlert (@PeckShieldAlert) September 1, 2022

“Domino effect of problems brought down the project”

The cryptocurrency market is experiencing one of its most complicated phases in throughout history, after going through years of great growth.

Many brokerages are laying off employees, cryptocurrencies died and companies in the market failed to honor commitments, showing that the moment is not the best.

Although bitcoin technology remains intact and working with great security, the price of the main currency loses value in relation to the Dollar in 2022.

For Babylon Finance, with the hacker attack suffered by Rari Fuse, combined with the bear market, the domino effect of problems made it impossible to rebuild the DeFi platform in the midst of problems.

Investors who lost money with the project and their token takes as a lesson a hard learning of how new and still risky is the decentralized finance sector.