Bancor, a decentralized automated market maker (AMM) and exchange protocol, has paused its temporary loss protection feature because of “hostile market conditions” and “manipulative behaviour.” Due to hostile market conditions, Bancor’s Impermanent Loss Protection is temporarily paused. IL protection will be reactivated on the protocol as the market stabilizes. More info: https://t.co/pHrdO4sTFd We're hosting a community AMA in 15 minutes: https://t.co/xgh8UmfNoL — Bancor (@Bancor) June 19, 2022 Bancor’s Liquidity Pool Bancor claimed in a Market Conditions blog post on Saturday that there is no ongoing attack and funds on the protocol remain secure. All of Bancor’s liquidity pools are still open for business. The decision to protect the protocol from “potentially manipulative individuals” was made to give it some “breathing room and recovery,” according to Bancor’s post. It comes as digital asset ecosystems continue to struggle due to a liquidity crisis and market contagion due to crypto lender Celsius’ decision to stop accepting withdrawals and transfers from its platform. Impermanent Loss In the world of decentralized finance, impermanent loss (IL) is a one-of-a-kind occurrence. It arises when the value of liquidity providers’ staked assets differs from the dual asset pairs in AMM pools compared to external market pricing. Changes in external pricing outside of a protocol’s pool are not automatically updated, leaving opportu...
