Hassan Maishera
TL;DR
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Balancer DAO is in talks to distribute $8m in recovered assets to affected liquidity providers following its recent $110 million hack.
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The recovered tokens are proposed to be paid out in the same tokens as originally provided.
Balancer DAO to Distribute $8M in Recovered Assets
The Balancer DAO team has begun talks to distribute roughly $8 million in recovered assets to affected liquidity providers (LPs). This latest development comes weeks after the protocol suffered a major exploit that drained over $110 million from its Balancer v2 vaults.
According to the team, the funds were recovered by whitehack actors and internal teams shortly after the exploit took place on November 3. The proposed plan includes a structured payout for whitehats, as well as a reimbursement mechanism for users based on snapshot data of their pool holdings at the time of the hack.
Balancer DAO added that the measures align with their previously adopted Safe Harbor Agreement, which outlines rules for ethical hackers recovering funds. The framework puts a $1 million limit per incident and requires full know-your-customer (KYC) and sanctions screening from participating whitehats.
However, several anonymous whitehats on Arbitrum declined to identify themselves, waiving any bounty claim.
Balancer DAO added that recovered tokens spread across networks like Ethereum, Polygon, Base, and Arbitrum, and include assets such as WETH, rETH, WPOL, and MaticX.
Liquidity providers (LPs) will receive payments in the same tokens they originally provided, calculated on a per-pool, pro-rata basis. The team is currently working on a claim mechanism and will require LPs to accept Balancer’s updated terms of use once the DAO approves the process.
Another $19.7 million in osETH and osGNO was rescued by StakeWise (a whitehat hacker), with its distribution set to be handled separately. An additional $4.1 million was recovered internally through coordinated efforts with another whitehat, Certora.
The recent exploit marks Balancer’s third major security incident. In 2023, the protocol lost more than $900k in an exploit a few days after warning its community users of a vulnerability and advised them to withdraw their funds.
The hack earlier this month saw Balancer’s TVL plunge from around $775 million to $258 million after the exploit. Its native BAL token has lost around 30% of its value and now trades at $0.8353.
