In a Jan. 6 tweet, decentralized finance protocol Balancer warned certain liquidity providers to remove their LPs “ASAP” due to an ongoing issue related to some of the service’s pools. Although some pools had their fees reduced to zero by the Balancer emergency multiplesig, the team said that it is not possible for all of the consequences to be addressed.
Balancer said the pools that need to be withdrawn include DOLA/bb-a-USD on Ethereum, It’s MAI Life and Smells Like Spartan Spirit on Optimism, and Tenacious Dollar on Fantom.
Important: The following pools’ LPs should immediately remove liquidity from their accounts as the issue can not be resolved by an emergency DAO. https://t.co/WcBeBvjdY2
— Balancer (@Balancer) January 6, 2023
At 2:03 am UTC on Jan. 6, Balancer took to Twitter to announce an “issue” with liquidity pools on the platform. It stated that protocol fees have been set to zero to mitigate the issue and that more details “will be publicly disclosed in the near future.”
Protocol fees for some Balancer pools were set at 0 in order to avoid an issue that has been resolved and will be made public.
The emergency multisig, which is a 4/7 composed of BLabs engineers as well as Balancer Maxis, has done this. https://t.co/AZo7yBQD17
— Balancer (@Balancer) January 6, 2023
Balancer stated that if a pool’s transaction fees have been set to zero by the emergency multisig, no further action is needed on the part of LPs. Balancer will not receive its share of the fees that pools continue to accrue, however.
Balancer is sixth in trading volume among the largest decentralized exchanges (DEX). handling According to analytics platform DefiLlama, there are more than $52 million worth of crypto trades every day.
Initial responses from the community have noted the vagueness of Balancer’s messages, leading some to assume the worst:
We are back!
— rugged-by-powell (,) (@powellruggedme) January 6, 2023
Raydium DEX was hacked in December. The attacker used an admin key for changing pool parameters. This tricked the pool smart contract to behave as if it had accumulated admin fees.