The decentralized finance (DeFi) protocol Bancor (BNT has given an update concerning its impermanent loss (IL) protection mechanism.
Bancor has paused the platforms’ protection mechanism due to what it calls “hostile market conditions.”
This was made known in an announcement by the Bancor team. The impermanent loss protection has ”been temporarily paused,” while promising that it will be turned back on “as the market stabilizes” the statement reads.
The team also affirmed that there was no attack on the platform and that funds are secure. It was also announced that users will continue to earn yield. They’ll also be entitled to withdraw their fully-protected value when IL protection is reactivated.
Elaborating on the reason for halting the impermanent loss protection, it was reported that anomalies, if not manipulative behavior have been observed in the data.
Bancor is a DeFi protocol that allows users to earn yields by staking only a single token. This is unique as other DeFi protocols stake a pair of tokens. It also differentiates itself from other protocols by (normally) offering full protection against impermanent loss.