Balancer Alerts $6.3 Million Funds At Risk, LPs Of 5 Pools To Remove Liquidity

Key Points:

• Balancer has advised its liquidity providers to withdraw funds from five pools due to the potential loss of $6.3 million.
• The exchange stated that these pools continue to function normally. They will continue to accrue swap fees, but the protocol will not take its cut from them.

On January 6, 2023, Balancer, a decentralized exchange, advised its liquidity providers to remove money from five pools containing $6.3 million in cash.

Balancer looks to be attempting to mitigate a broader possible exploit or issue. It stated that it has employed emergency measures to reduce protocol costs in some of its other pools to zero.

This is done to prevent issues that will be disclosed in the future. However, these pools cannot do so, so it encourages liquidity providers to withdraw funds as soon as possible.

The five mining pools are located in Ethereum, Polygon, Optimism, and Fantom. The largest pool is DOLA/bb-a-USD, currently managing $3.6 million. Others are bb-am-USD/miMATIC on Polygon ($9,000 locked), It’s MAI life on Beethoven X (powered by Balancer) on Optimism ($1.1 million locked), and Smells Like Spartan Spirit ($9,000 locked) 90,000 USD, Tenacious Dollar of Beethoven X on Fantom (locked amount of 1.6 million USD).

However, Balancer stated that these pools continue to function normally, so no action is needed by LPs of those pools at the end of the thread. They will continue to accrue swap fees, but the protocol will not take its cut from them.

Balancer is a DeFi system that enables users to exchange tokens in pools of two. These tokens are supplied to the pools by liquidity providers, who are compensated for their services.

On November 6, 2022, Coincu reported that Aave community has voted to approve the proposal regarding the implementation of a new aToken primitive called “Staked aTokens”, and the addition of Balancer BPT as collateral.

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