In a Jan. 6 tweet, decentralized finance protocol Balancer warned certain liquidity providers to remove their LPs “as soon as possible” due to an ongoing issue related to some of the service’s pools. Balancer emergency multisig has had fees set to zero for some pools, but the team said not all of the impact of the as-yet-unknown issue could be mitigated in this way.
Balancer said the pools to be withdrawn include DOLA/bb-a-USD on Ethereum, It’s MAI Life and Smells Like Spartan Spirit on Optimism, and Tenacious Dollar on Fantom.
IMPORTANT: Due to a related issue, LPs of the following pools should remove their liquidity as soon as possible as the issue cannot be mitigated by the emergency DAO. https://t.co/WcBeBvjdY2
— Balancer (@Balancer) January 6, 2023
At 2:03am UTC on Jan 6, Balancer took to Twitter to announce an “issue” with liquidity pools on the platform. It explained that protocol fees have been set to zero to mitigate the issue and that more details “will be announced publicly in the near future”.
Some balancer pools log fees have been set to 0 to avoid an issue that is now being mitigated and will be publicly announced in the near future.
This was done by the emergency multisig, a 4/7 composed of BLabs engineers and Balancer Maxis: https://t.co/AZo7yBQD17
— Balancer (@Balancer) January 6, 2023
Balancer explained that once a pool’s transaction fees have been set to zero by the emergency multisig, no further action is required from the LPs. The pools will continue to accumulate fees, but Balancer itself will not receive its share.
Balancer is the sixth largest decentralized exchange (DEX) by trading volume, processing over $52 million in crypto trades daily, according to analytics platform DefiLlama.
Initial responses from the community noted the vagueness of Balancer’s messages, leading some to assume the worst:
here we go again
— Rugged-by-Powell (,) (@powellruggedme) January 6, 2023
Back in December, Raydium DEX was attacked by a fee exploit, where the attacker used an admin key to change pool parameters, causing the pool smart contract to behave as if the entire pool was off accumulated management fees.
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