Decentralized exchange Balancer (BAL) is warning liquidity providers to withdraw funds from five altcoin pools where $6.3 million is at risk.
Balancer warns altcoin liquidity providers that $6.3M is at risk
The warning to liquidity providers appears to be part of a larger potential bug or bug that Balancer is trying to mitigate. Balancer said it uses emergency checks to set protocol charges to zero for some of its other pools. This move was made to protect against an issue that it would disclose in the future.
The team’s first move right now has been to set the protocol fees of some balancer pools to zero. According to the official announcement, “The protocol fees of some Balancer pools are set to 0 to avoid an issue that is currently mitigated and will be made public in the near future. This move was made by 4/7 emergency multisig made up of BLabs engineers and Balancer Maxis.”
IMPORTANT: Because of a related issue, LPs of the following pools should remove their liquidity ASAP as the issue cannot be mitigated by the emergency DAO. https://t.co/WcBeBvjdY2
— Balancer (@Balancer) January 6, 2023
The five pools are on Ethereum, Polygon, Optimism and Phantom. The largest pool is DOLA/bb-a-USD, which is currently facing $3.6 million in funding. “Due to a related issue, these pools should remove their liquidity as soon as possible as the issue cannot be mitigated by the emergency DAO,” the Balancer team warned in a recent Twitter announcement. Altcoin pools that liquidity providers should pay attention to:
- DOLA / bb-a-USD
- bb-am-USD/miMATIC
- It’s MAI life
- Smells Like Spartan Spirit
- Tenacious Dollar
Balancer (BAL) price drops
Ranking 97th in terms of market value, BAL fell by around 2% shortly after the announcement. Balancer is a DeFi protocol that allows users to trade tokens in pairs called pools. Liquidity providers supply these tokens to pools and charge fees to do so. Stopping transactions for an attack or countermeasure against the pools is a serious blow to the protocol’s operations and therefore to its price.
Launched in March 2020, Balancer is an automated market maker (AMM) developed on Ethereum. In its initial funding round, it raised $3 million in funding from Placeholder and Accomplice. The Balancer protocol works as a self-balancing weighted portfolio, price detector, and liquidity provider. In exchange for users contributing to customizable liquidity pools, they earn revenue through the recently introduced BAL token.
Balancer is similar to Uniswap and Curve protocols in that it allows each user to create a token pool. The pool automatically adjusts to balance the weights of the tokens regardless of the price changes. Another feature that makes the Balancer protocol unique is that multiple tokens can be added and ETH is not required for this. As you follow on Kriptokoin.com, Balancer currently has one of the largest liquidity pools in the market.
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