Blue-chip DeFi protocol Balancer has issued a statement on Twitter and has warned certain pools’ liquidity providers to withdraw funds. Users of five liquidity pools are advised to withdraw all of their funds ASAP.
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 dire warning to the liquidity providers to withdraw their money from five pools totaling $6.3 million.
The balancer emergency multisig has put some pools’ fees to zero. The pools that need to be withdrawn include Tenacious Dollar on Fantom, It’s MAI life, and Smells Like Spartan Spirit on Optimism, as well as DOLA / bb-a-USD on Ethereum.
“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. Protocol fees of some Balancer pools have been set to 0 to avoid an issue that is now mitigated and will be publicly disclosed in the near future.”
According to Balancer, LPs don’t need to take any additional action if an emergency multisig has set a pool’s transaction costs to zero. Fees will still be collected by the pools, but Balancer will not receive a portion of them.
“These pools continue to function normally, so no action is needed by LPs of those pools. They will continue to accrue swap fees, but the protocol will not take its cut from them.”
Decentralized exchange platforms have grown in popularity as a means of exchanging crypto assets and generating passive income as a result of the recent boom in interest in decentralized finance (DeFi).
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 pool protocol that enables ERC-20 asset exchanging without the need for centralized intermediaries.