Decentralized finance (DeFi) protocol Balancer announced on Twitter that it is currently experiencing a technical issue and called on liquidity providers to withdraw from certain pools. We explain the situation to you.
Balancer alerts liquidity pools
The information was reported to us this Friday by the Balancer team. The protocol, which provides liquidity to various decentralized applications of Ethereum (ETH), explained to face a technical problem could not be processed by the emergency DAO:
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
— Balance (@Balance) January 6, 2023
Protocol called liquidity providers to withdraw their funds from the liquidity pools ” as soon as possible “. Here is the list of affected LPs: DOLA / bb-a-USD on Ethereum, It’s MAI life and Smells Like Spartan Spirit on Optimism, and Tenacious Dollar on Fantom.
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Concretely, the problem was identified at the end of the morning by the Balancer team. Details have not yet been disclosed but the press release assures that “this will be publicly explained soon”. For the time being, the emergency multisig (i.e. the addresses authorized to intervene in an emergency) have validated the modification of their share of pool fees to 0.
The extent of potential damage has not been confirmed at the time of this writing. However, we can see that the largest liquidity pool, bb-a-USD (Balancer Boosted Aave USD), is $65 million. It also experienced particularly remarkable volumes of 54 million dollars in 24 hours.
According to data from DefiLlama, Balancer is the sixth largest decentralized exchange (DEX) by trading volume, processing over $52 million in crypto transactions every day on the Ethereum, Polygon and Arbitrum blockchains.
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Source: Defillama, Twitter release
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