Bancor Protocol Suspends its Protection Feature

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The team of DeFi protocol Bancor has recently suspended its Impermanent Loss Protection (ILP) feature due to “hostile market conditions.”

According to the company:

“The ILP defense suspension measure should give the protocol some time to breathe and recover. While we wait for the markets to stabilize, we are working to reactivate the option as soon as possible.”

The ILP compensates for possible temporary losses of users when depositing assets into the protocol’s liquidity pools at the expense of BNT tokens. The coins come from rewards for placing funds in pools owned by Bancor or from an additional issue.

The team has noted the recent sell-off by users of rewards accumulated over the past 18 months has led to the need to issue new BNT.

Additional pressure on the price of the token was exerted by the “insolvency of two large centralized organizations,” which the developers did not name.

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