Bancor pushes the pause button, but does that really work for BNT

ambcrypto.com:

The latest crypto-market sell-off managed to put a lot of pressure on DeFi platforms. Bancor, like many other platforms like it, is feeling the heat too. Bancor recently announced a temporary pause on impermanent loss protection. The announcement is part of its plan to cut down on huge liquidity pool outflows.

Bancor made the announcement through a market condition update, one that was released on 20 June. The DeFi protocol cited hostile market conditions as the reason for disabling impermanent protection. It, however, noted that the feature would be re-activated when market conditions improve. The move comes amid concerns of DeFi platforms being attacked.

Bancor’s latest update assured its users that the protocol is secure and is not facing any attacks. However, it did highlight the need to deploy such measures to ease the pressure that the DeFi platform has been facing.

“The temporary measure to pause IL protection should give the protocol some room to breathe and recover,” stated the update

Bancor also followed up the update with anAMA to provide more clarity over the matter. Mark Richardson, Research Lead at Bancor, noted that the impermanent protection pause would discourage any potential economic attacks.

This was in reference to the potential of a bank run, one triggered if major players such as 3AC and Celsius start pulling their funds.

BNT has been on a downward spiral since 10 June. This date saw it drop from $1.32 to $0.43 on 18 June. The sell-off resulted in nine consecutive daily red candles, highlighting panic over the likelihood of a liquidity run.

BNT is now heavily oversold due to the panic selling that ensued over the last few days. It painted its first green candle during the trading session on 19 June after