Protocol Outlines Payout Plan Following $128M Vault Drain
Balancer has unveiled a reimbursement framework to return approximately $8 million in recovered assets to liquidity providers impacted by the early-November exploit that drained more than $128 million from its pools. The recovery comes through a mix of white-hat rescues and internal emergency measures aimed at limiting user losses.
Balancer Recovered Funds After $128M Attack
The decentralized exchange and automated portfolio manager confirmed that around $28 million was successfully retrieved, though a portion — $19.7 million in osETH and osGNO — is now being overseen by liquid-staking platform StakeWise. The remaining amount, close to $8 million, forms the basis of the proposed user reimbursement.
The attack targeted a vulnerability in Balancer V2 Composable Stable Pools, enabling attackers to siphon roughly $128.6 million. The protocol’s new reimbursement model follows a non-socialized structure, ensuring that only affected liquidity providers in the compromised pools receive returned assets.
Distributions will be calculated pro-rata based on BPT holdings at the moment the exploit occurred, and payouts will be delivered in the same tokens that were recovered.
White Hats Recover $3.86M and Earn Bounties
A key part of the recovered amount came from white-hat intervention. Six actors collectively secured about $3.86 million, and under the proposal, each will receive a 10% bounty, capped at $1 million per operation.
The largest single rescue was carried out by an anonymous white hat on Polygon who secured $2.68 million. Security researcher Bitfinding retrieved $963,832 from Ethereum mainnet, while others contributed smaller recoveries on Base and Arbitrum.
To receive bounties, white hats must complete identity verification and compliance checks under Balancer’s SEAL Safe Harbor Agreement. Some rescuers on Arbitrum waived their rewards by declining to identify themselves.
Balancer has defined a 180-day window for affected users and rescuers to claim their allocations. After this period, all unclaimed tokens will be classified as dormant and subject to future governance decisions.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.