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Bancor (BNT) End Impermanent Loss Protection, Blame ‘Hostile Market Conditions’

Bancor Protocol has ‘paused’ impermanent loss protection, blaming hostile market conditions for the move. 

The announcement came on Sunday, following a tough week for crypto markets and a tough week for Bancor’s native token. Bancor Network Token (BNT) is currently down 49.1% over the past 7 days at $0.521353.

According to Bancor, their decision came as a response to the ‘recent insolvency’ of ‘two large centralized entities.’ The company did not go as far as to name the two.

“Due to hostile market conditions, Bancor’s Impermanent Loss Protection is temporarily paused,” said Bancor in a Medium post earlier today. “IL protection will be reactivated on the protocol as the market stabilizes. This is a temporary measure to protect the protocol and its users.”

Last Monday, crypto lending platform Celsius suspended all withdrawals amid growing concerns for its future. Venture capital (VC) firm Three Arrows Capital is facing an insolvency crisis of its own. The struggles of these big players have helped to foment an atmosphere of fear, uncertainty, and doubt right across the market.

Bancor names names

In an AMA also released this Monday, Bancor’s Head of Research, Mark Richardson, joined the dots for those who hadn’t already done so themselves. While Bancor’s Medium post failed to name any specific players, Richardson was markedly less reticent.

“We found another Celsius wallet that was going to withdraw $10 million from the protocol and there’s also been a sort of wave of additional panic on the protocol that resulted in a very, very large amount of withdrawals piling up,” he said. “It started to look something like a bank run event where it would be difficult to imagine the protocol withstanding such a very – such a large flight of liquidity all at once.”

Richardson went on to say that one centralized entity was now regarded as a
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