Bancor removes impermanent loss protection

Bancor just published a blog post explaining that impermanent loss protection is paused due to market conditions: [

IL protection is the primary reason people use Bancor so this update is very surprising. The change affects all deposits:

>Withdrawals performed during this unstable period will not be eligible for IL protection.

According to the blog post Bancor plant to re-enable IL protection in the future:

>The temporary measure to pause IL protection should give the protocol some room to breathe and recover. While we wait for markets to stabilize, we are working to get IL protection reactivated as soon as possible.

It sounds like the Bancor DAO hasn’t voted on the decision yet, but the Bancor team already annouced that IL protection is paused on their blog and [on twitter](

Without IL protection Bancor exposes all deposited tokens to BNT price fluctuations, similar to token-BNT pairs on uniswap v2.

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10 thoughts on “Bancor removes impermanent loss protection”

  1. So the insurance people want because of volatile markets, is being removed by Bancor due to volatile markets. Makes sense.

  2. Wow, I guess that IL is just smoke and mirrors. Was really thinking about putting some DAI in there. Geez, there are traps and surprises everywhere right now in defi. Thanks for your post!

  3. I don’t know who needs to hear this, but impermanent loss is a good thing for AMMs and attempts to “protect” users from it is stupid.

  4. They need to do that, otherwise, the protocol can go down. The protocol’s own liquidity was been used to fund ILP. Are you still using it?


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