Balancer Introduces StableSurge Hook for Peg Protection

🛡️ Peg protection unveiled

By Aura
Oct 17, 2024, 2:06 PM
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Balancer is set to launch the StableSurge Hook, a new feature designed to protect asset pegs in liquidity pools.​ Here's how it works:

  • Pools can set an imbalance threshold (e.​g.​, 10%)
  • If exceeded, a surge fee activates for sellers hurting the peg
  • Buyers helping the peg only pay the regular base fee

This mechanism:

  • Aligns incentives between liquidity providers and projects
  • Increases fees for LPs during imbalances
  • Supports projects in maintaining asset pegs

Balancer positions itself as a base layer for AMM innovation, encouraging developers to build on their platform and amplify liquidity on Aura.​

Sources

Balancer will offer Peg Protection via its StableSurge Hook ⚡ How does it work? Let’s say there’s an LRT-ETH pool. This pool is meant to be 50% LRT and 50% ETH. Then one day, the wind blows, CT gets nervous about LRT, and people start selling their LRT for ETH, increasing the

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