The firm’s director has launched this initiative to payback creditors before the expiration of the moratorium extension.
HongKong based crypto lender protocol Babel Finance is having a tough time paying back the creditors. The co-founder Wang Li lost $524 million in proprietary trading losses and $224 million lost after lenders liquidated collateral that underpinned loans issued to Babel.
The protocol froze withdrawals in June 2022 after the collapse of Terra network citing “unusual liquidity pressure”.
Babel has filed for a moratorium extension to prevent creditors from making claims. However, the extension is about to expire in the next 6 months and the protocol is now looking for ways to pay them back using crypto-backed stablecoin.
Yang Zhou, co-founder and sole director of Babel Finance has teamed up with former employees to build a new DeFi platform ”HOPE” that will issue a stablecoin with the same name.
As per the proposal, the hope stablecoin will be backed by the crypto reserve comprising Bitcoin (BTC) and Ethereum (ETH) to maintain a peg of $1.
The traders can benefit from arbitrage opportunities when the value dips below or rises above the peg. The new protocol work somewhat similar to Liquity (LQTY crypto) on the Ethereum blockchain and terra USD (UST) stablecoin.
The Latest Crypto Headlines:
- Arthur Hayes is bullish on crypto and shared his timeline on the next “mega upcycle”
- Bankrupt crypto lending protocol Celsius reopen withdrawals for specific accounts
- Is Silvergate Capital on the verge of bankruptcy?
Paras is a blockchain writer & video creator at Katoch Tubes. In his free time, he loves watching space exploration documentaries & Hollywood movies.