Blue-chip DeFi protocol Balancer issued a statement on Twitter, warning certain pools’ liquidity providers to withdraw funds. Users of five liquidity pools are advised to withdraw all their funds as soon as possible.
According to a statement from Balancer Labs, the company responsible for the development of Balancer (BAL) DeFi.
The statement was also a stark warning to liquidity providers to withdraw their money from five pools totaling $6.3 million.
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
The Balancer Emergency Multisig has zeroed the fees of some pools. Pools to be withdrawn include Tenacious Dollar on Fantom, It’s MAI life and Smells Like Spartan Spirit on Optimism, and DOLA/bb-a-USD on Ethereum.
“Due to an associated issue, LPs of the following pools should remove their liquidity as soon as possible as the issue cannot be mitigated by the emergency DAO. Some balancer pools have had their log fees set to 0 to avoid an issue that is now mitigated and will be publicly announced in the near future.”
According to Balancer, LPs do not need to take any additional action if an emergency multisig has zeroed out a pool’s transaction costs. Fees continue to be collected from the pools, but Balancer does not receive any portion of them.
“These pools continue to function normally, so no action is required from the LPs of these pools. They will continue to charge swap fees, but protocol will not make their reduction.”
Due to the recent boom in interest in decentralized finance (DeFi), decentralized exchange platforms are enjoying increasing popularity as a means of exchanging crypto assets and generating passive income.
Balancer is one such Automated Market Maker (AMM) that allows users to create liquidity pools with up to eight different tokens in any ratio. It is a liquidity pooling protocol that allows the exchange of ERC-20 assets without the need for central intermediaries.
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