Balancer Issues Warning As $6.3 Mn Funds Are Now At Risk

Decentralized exchange Balancer has issued a warning to its liquidity providers, instructing them to remove their funds from five pools containing a total of $6.3 million. What seems to be a component of a broader potential exploit or a technical flaw, Balancer has been prescribing ways to eliminate it.

Balancer Under Damage Control

On January 6, at 2:03 a.m. UTC, Balancer took to Twitter in order to make an announcement regarding an “issue” with the platform’s liquidity pools. In order to alleviate the problem, the DeFi application stated that the protocol fees had been set to zero, and that additional information would be publicly provided in the near future. However, the team also emphasized the fact that this particular strategy would not be effective in mitigating all of the implications of the mystery problem.

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

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Balancer’s Affected Pools

Balancer provided a list of the pools that need to have funds withdrawn from them. These pools include DOLA / bb-a-USD on Ethereum, It’s MAI life and Smells Like Spartan Spirit on Optimism, and Tenacious Dollar on Fantom. Out of which, the DOLA / bb-a-USD pool currently manages $3.6 million worth of assets, making it the largest of the three pools.

The Balancer token is an Ethereum-based asset that serves as the driving force behind the Balancer protocol, an automated market maker that gives anybody the ability to build or add liquidity to trading pools while earning customizable trading fees.

As things stand, the price of Balancer (BAL) is currently being traded at $5.35. This represents an increase of 1.17% in the past 1 hour, in contrast to its 1.19% drop during the last 24 hours, as per crypto market tracker CoinMarketCap.

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Pratik has been a crypto evangelist since 2016 & been through almost all that crypto has to offer. Be it the ICO boom, bear markets of 2018, Bitcoin halving to till now – he has seen it all.

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.