In the early 2000s, a company came to believe it had discovered a durable source of power. Its business extended beyond the production of energy into the management of prices, expectations, and market perception.

At Enron, executives were compensated in equity, hedged exposure through complex financial structures, and simultaneously exerted influence over the markets in which they were the largest participants. Their position allowed them to shape reported performance, contractual terms, and forward expectations. For a period, this configuration remained stable. Market prices aligned with internal narratives, and those narratives were reinforced by concentrated ownership.

When market conditions shifted, there was no external pool of marginal buyers capable of absorbing risk. The actors most invested in sustaining price levels were also the most exposed to their decline. Defensive actions taken to protect individual positions compounded systemic stress. Value erosion followed directly from concentration, not in spite of it.

During the early hours of February 2, BTC fell from $78K to $74K. The drop dragged the broader market down, with altcoins losing more than two digits in percentage terms.

Despite the negative impact across many tokens, one suffered far more than the rest: $BAL.

$BAL is the token of Balancer. It is among the DeFi tokens that have been losing value over the past few years. $BAL can be locked on Balancer in exchange for $veBAL, its governance token. $veBAL is used to decide which pools receive new $BAL emissions, with the goal of incentivizing liquidity.

One individual accumulated millions of dollars worth of $BAL over the past few years: Humpy. If you are not familiar with him, we recommend reading this article.

Humpy is an important figure in Balancer’s story. He invested significant capital with the goal of capturing the $BAL incentives distributed by the protocol. He is known for attempting to capture DAOs across the market, seeking to extract as much value as possible by acquiring their governance tokens. His most recent attempted attack took place on Compound.

As Humpy accumulated millions of dollars in $BAL, he began using it as collateral in lending markets such as Aave and Venus. $BAL was pledged as collateral to borrow stablecoins and trade in the market.

However, tokens like $BAL are extremely volatile. For this reason, lending markets typically set low LTVs, liquidating borrowers if their collateral loses too much value. This is a way to prevent bad debt—an insolvent position for the protocol.

When $BTC fell during the early hours of February 2, it directly impacted the price of $BAL. As a result, loans tied to addresses associated with Humpy were liquidated.

Two addresses linked to humpy.eth (0x8a8743afc23769d5b27fb22af510da3147bb9a55 and 0x36cc7b13029b5dee4034745fb4f24034f3f2ffc6) suffered liquidations of up to $141K. All of them used $BAL as collateral.

Adding up the liquidations across the lending markets, $3.62M in $BAL was liquidated on February 2.

As is common during liquidations in lending markets, bots searched for the best on-chain source of liquidity to sell Humpy’s liquidated $BAL tokens. In this case, that source was Balancer itself.

On February 2, the $BAL/$WETH v2 pool moved $5.8M, its highest volume since February 2023.

Analyzing the addresses that sold the most $BAL in the pool, the top 10 sellers dumped $3M worth of the token during the early hours of 02/02, precisely when the liquidations took place.

All signs point to bots dumping $BAL on Balancer—no anomalous behavior.

However, given the pool’s low liquidity, $3M of selling pressure had a direct impact on the $BAL price. Between 12:00 a.m. and 2:45 a.m. on the fateful 02/02, the token dropped 57%.

The decline in $BAL directly affected Humpy’s loans. The lower the price fell, the greater the chance that his losses would grow even larger.

When we analyze the largest $BAL buyers over the last 6 days, we see that all of them made their first purchases on January 31, when the liquidations began.

One address stands out among them: 0xeb9863e28d0fc0702a5197e66674f86ee2c35b5e.

Between 01/31 and 02/02, this address bought $1.41M worth of $BAL, spread across 268 trades executed during this period. The wallet is linked to other addresses in the top 10 buyers list, suggesting that the same entity or individual controls multiple wallets.

Although none of them are directly linked to Humpy, all evidence suggests that these purchases were made in an attempt to support the $BAL price and prevent further liquidations in lending markets.

The sudden drop in $BAL is the result of a combination of issues:

• A large share of the circulating supply concentrated in one or a few wallets.

• Lending markets accepting extremely low-liquidity tokens as collateral.

• Weak risk management on both the borrower and protocol sides, with no effective way to liquidate large positions without significantly impacting price.

In The Merchant of Venice, Shylock invokes the strict letter of the law to demand a pound of flesh from Antonio. He does not appeal to revenge or emotion, but to formal legitimacy. “I stand for judgment,” he says, insisting that the contract, precisely because it is valid, must be enforced in full.

What the play exposes is not the illegitimacy of the contract, but the fragility of systems built on maximal enforcement. Once Shylock pushes his right to its absolute limit, the legal framework that grants him authority turns against him.

That same logic appears in financial systems where control, leverage, and enforcement converge. When power is converted into collateral and liquidation is triggered, the right to sell becomes inseparable from the inability to sell without collapse. What was once influence becomes exposure, and enforcement destroys the conditions that made power meaningful.

In the early 2000s, a company came to believe it had discovered a durable source of power. Its business extended beyond the production of energy into the management of prices, expectations, and market perception.

At Enron, executives were compensated in equity, hedged exposure through complex financial structures, and simultaneously exerted influence over the markets in which they were the largest participants. Their position allowed them to shape reported performance, contractual terms, and forward expectations. For a period, this configuration remained stable. Market prices aligned with internal narratives, and those narratives were reinforced by concentrated ownership.

When market conditions shifted, there was no external pool of marginal buyers capable of absorbing risk. The actors most invested in sustaining price levels were also the most exposed to their decline. Defensive actions taken to protect individual positions compounded systemic stress. Value erosion followed directly from concentration, not in spite of it.

During the early hours of February 2, BTC fell from $78K to $74K. The drop dragged the broader market down, with altcoins losing more than two digits in percentage terms.

Despite the negative impact across many tokens, one suffered far more than the rest: $BAL.

$BAL is the token of Balancer. It is among the DeFi tokens that have been losing value over the past few years. $BAL can be locked on Balancer in exchange for $veBAL, its governance token. $veBAL is used to decide which pools receive new $BAL emissions, with the goal of incentivizing liquidity.

One individual accumulated millions of dollars worth of $BAL over the past few years: Humpy. If you are not familiar with him, we recommend reading this article.

Humpy is an important figure in Balancer’s story. He invested significant capital with the goal of capturing the $BAL incentives distributed by the protocol. He is known for attempting to capture DAOs across the market, seeking to extract as much value as possible by acquiring their governance tokens. His most recent attempted attack took place on Compound.

As Humpy accumulated millions of dollars in $BAL, he began using it as collateral in lending markets such as Aave and Venus. $BAL was pledged as collateral to borrow stablecoins and trade in the market.

However, tokens like $BAL are extremely volatile. For this reason, lending markets typically set low LTVs, liquidating borrowers if their collateral loses too much value. This is a way to prevent bad debt—an insolvent position for the protocol.

When $BTC fell during the early hours of February 2, it directly impacted the price of $BAL. As a result, loans tied to addresses associated with Humpy were liquidated.

Two addresses linked to humpy.eth (0x8a8743afc23769d5b27fb22af510da3147bb9a55 and 0x36cc7b13029b5dee4034745fb4f24034f3f2ffc6) suffered liquidations of up to $141K. All of them used $BAL as collateral.

Adding up the liquidations across the lending markets, $3.62M in $BAL was liquidated on February 2.

As is common during liquidations in lending markets, bots searched for the best on-chain source of liquidity to sell Humpy’s liquidated $BAL tokens. In this case, that source was Balancer itself.

On February 2, the $BAL/$WETH v2 pool moved $5.8M, its highest volume since February 2023.

Analyzing the addresses that sold the most $BAL in the pool, the top 10 sellers dumped $3M worth of the token during the early hours of 02/02, precisely when the liquidations took place.

All signs point to bots dumping $BAL on Balancer—no anomalous behavior.

However, given the pool’s low liquidity, $3M of selling pressure had a direct impact on the $BAL price. Between 12:00 a.m. and 2:45 a.m. on the fateful 02/02, the token dropped 57%.

The decline in $BAL directly affected Humpy’s loans. The lower the price fell, the greater the chance that his losses would grow even larger.

When we analyze the largest $BAL buyers over the last 6 days, we see that all of them made their first purchases on January 31, when the liquidations began.

One address stands out among them: 0xeb9863e28d0fc0702a5197e66674f86ee2c35b5e.

Between 01/31 and 02/02, this address bought $1.41M worth of $BAL, spread across 268 trades executed during this period. The wallet is linked to other addresses in the top 10 buyers list, suggesting that the same entity or individual controls multiple wallets.

Although none of them are directly linked to Humpy, all evidence suggests that these purchases were made in an attempt to support the $BAL price and prevent further liquidations in lending markets.

The sudden drop in $BAL is the result of a combination of issues:

• A large share of the circulating supply concentrated in one or a few wallets.

• Lending markets accepting extremely low-liquidity tokens as collateral.

• Weak risk management on both the borrower and protocol sides, with no effective way to liquidate large positions without significantly impacting price.

In The Merchant of Venice, Shylock invokes the strict letter of the law to demand a pound of flesh from Antonio. He does not appeal to revenge or emotion, but to formal legitimacy. “I stand for judgment,” he says, insisting that the contract, precisely because it is valid, must be enforced in full.

What the play exposes is not the illegitimacy of the contract, but the fragility of systems built on maximal enforcement. Once Shylock pushes his right to its absolute limit, the legal framework that grants him authority turns against him.

That same logic appears in financial systems where control, leverage, and enforcement converge. When power is converted into collateral and liquidation is triggered, the right to sell becomes inseparable from the inability to sell without collapse. What was once influence becomes exposure, and enforcement destroys the conditions that made power meaningful.