Babel Finance’s executive director announced plans to introduce a decentralized Finance (DeFi) platform to facilitate creditors’ repayment.
The embattled crypto lender seeks to roll out a crypto-backed stablecoin coinciding with the introduction of DeFi. The latter seeks to repay the $766 million loss incurred by creditors in 2022.
Babel Journey to Recover from Frozen Withdrawals
Challenges engulfing the Hong Kong-based crypto lender traced to June 2022, when the sole director admitted unusual liquidity pressure. The mounting pressure compelled Babel Finance to freeze withdrawals citing the contagion effect of the market meltdown emerging from the $60 billion Terra collapse.
The Hong Kong-based Babel Finance revealed plans to file a moratorium extension that would hinder creditors from lodging claims for half a year. The lender’s report indicates that Babel’s co-founder, Wang Li, incurred a $524 million loss from proprietary trading. Li laments that Babel is bound to lose another $224k given the liquidation of the collateral underpinning loans by the creditors.
Hope Ecosystem Set for Dollar-Pegged Stablecoin
The co-founder of Babel Finance, Yang Zhou, announced that Hong Kong announced an assembly of former colleagues in building Hope. The sole director of Babel explained that Hope would serve as the DeFi platform featuring a stablecoin carrying the same name.
Zhou asserted that the proposal indicates that Hope stablecoin is fully backed by ether and bitcoin. The stablecoin would facilitate the retention of the dollar peg. Besides, traders can leverage the arbitrage opportunities, particularly whenever the Hope value sinks below the dollar peg or exchanges above it.
Hope design mirrors Terra USD (UST) stablecoin despite its collapse in June 2022, triggering contagion decline. Its design differs from the fiat-backed currencies, including tether (USDT) and USD Coin (USDC).
HOPE Ecosystem
The statement conveyed by Zhou revealed that users could purchase $HOPE. Currently, $Hope is available at the discounted price level of 50 cents till the expiry of its initial offering. The subsequent acquisition would necessitate HopeSwap.
Zhou demonstrated that the $HOPE ecosystem would feature the reserves-backed native token. The native token is set to regain from the $0.50 towards its $1 peg as the crypto industry recovers. $HOPE would derive liquidity from dedicated market markers to enable holders to track the price when seeking to exit from the ecosystem.
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