Bancor Disables IL Protection Services Until Further Notice
- Bancor network markets itself as ‘the only DeFi training and staking protocol with single-sided liquidity and 100 percent impermanent loss protection’.
Bancor Network, a decentralized financial ecosystem offering cryptocurrency trading and staking services, has announced that its Impermanent Loss Protection service is off until further notice. The company has cited the current crypto market conditions that have left Bitcoin down from ATH to around $17k during the weekend.
As for Bancor’s native token, BNT, the price has declined approximately 85.6 percent in the past year. Making matters worse, the token has lost approximately 63.2 percent of its value in the past 30 days.
Bancor Network Falls Victim of The System
Bancor network markets itself as ‘the only DeFi training and staking protocol with single-sided liquidity and 100 percent impermanent loss protection’. Now, the most critical part of their business is gone after months of operations.
“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. This is a temporary measure to protect the protocol and its users,” Bancor noted in a blog post.
The persistent and urgent question now is, are customers’ funds protected only when the market is thriving?
Well, Bancor may have found itself a victim of the ongoing macroeconomic changes. Remember the United States economy is still inflated by the endless printing of the dollars. Additionally, the ongoing geopolitical tensions and uncertainty led by the Russia-Ukraine crisis.
Notably, the crypto market has met itself as a victim of its success. The crypto market has been accused of aiding parties evading sanctions. In this case, Russia’s acceptance of Bitcoin in its oils industry.
Nevertheless, crypto companies that did not have a solid market structure by the end of 2021, are struggling to stay afloat during the ongoing crypto winter. This can be seen through the Celsius and Terra LUNA crises.
Notably, the Bancor network blamed the market volatility for its inability to deliver on its promises.
“These costs have been amplified by the recent insolvency of two large centralized entities who were key beneficiaries of BNT liquidity mining rewards as long-time LPs in Bancor V2.1. To cover their liabilities, these entities have rapidly liquidated their BNT positions and withdrawn large sums of liquidity from the system, while an unknown entity has opened a large short position on the BNT token on an external exchange,” the company noted.
The Bancor Network is ranked 191 by CoinGecko’s market capitalization data. According to on-chain data provided by ethplorer.io, BNT has a market cap of $137,603,579.00 and 38,033 holders as of publication time.
The largest BNT holder controls 42.56 percent of the total circulating supply.