The eels eat the rock, grasses from the surface, stray animals that fall into the water, and whenever one of them dies to starvation, they'll eat that too. So far they haven't resorted to eating each other alive, but they're getting hungrier. The imps are looking tastier and tastier.

Xir'ain wouldn't stand a chance against Balon in a fair fight, on land at least. I doubt Xir'ain could do anything to harm the giant if he wanted to. So long as Balon proved his strength, it wouldn't matter what he did to Xir'ain.