Blue-chip protocol DeFi Balancer issued a statement on Twitter and warned some pool 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 released by Balancer Labs, the company in charge of managing the development of Balancer (BAL) DeFi.
The statement was also a stern warning to liquidity providers to withdraw their money from five pools totaling $6.3 million.
Balancer’s emergency multisig has zeroed out fees for some pools. Pools to be removed 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 a related issue, LPs in the following pools should withdraw their liquidity as soon as possible as the issue cannot be mitigated by the emergency DAO. Protocol fees for some Balancer pools have been set to 0 to avoid an issue which is now mitigated and will be made public in the near future.
According to Balancer, LPs don’t need to take any further action if an emergency multisig has brought a pool’s transaction costs to zero. The fee will still be collected by the pools, but Balancer will not receive a portion of it.
“These pools continue to operate as normal, so no action is required from the LPs of these pools. They will continue to accrue swap fees, but the protocol will not take away their share.
Decentralized exchange platforms have grown in popularity as a way to trade crypto assets and generate passive income following the recent boom in interest in decentralized finance (DeFi).
Balancer is one such automated market maker (AMM) that allows users to create pools of liquidity with up to eight different tokens in any ratio. It is a liquidity pool protocol that allows the exchange of ERC-20 assets without the need for centralized intermediaries.