DeFi Protocol Balancer to Refund $8M to Users After $128M DeFi Hack

Balancer has proposed a plan to return nearly $8 million in recovered assets to liquidity providers affected by a major exploit earlier this month. 

In early November, Balancer V2 Composable Stable Pools suffered an attack that exploited a vulnerability, allowing the perpetrators to steal approximately $128.6 million.

Since then, the project says around $28 million has been recovered through internal operations and white-hat interventions. Of this amount, roughly $19.7 million in osETH and osGNO remains under the management of liquid staking protocol StakeWise.

How Balancer Plans to Distribute the Assets

Consequently, Balancer has now proposed a framework to restore funds exclusively to those directly affected. Specifically, the plan follows a non-socialized model, ensuring compensation is limited to liquidity providers in the exploited pools.

According to the proposal, payouts will be based on each user’s Balancer Pool Token balance at the time of the attack. Balancer added that all transfers will be made in-kind. In other words, users will receive the same types of tokens that were recovered during rescue efforts.

White Hat Contributions and Bounties

The proposal also highlights the critical role of white hat responders in mitigating the attack. For instance, six individuals or teams recovered a total of $3.86 million, with each eligible for a 10% bounty capped at $1 million per operation.

Notably, the largest recovery came from an individual known only as “Anon #1,” who secured approximately $2.68 million on the Polygon network. On Ethereum, security researcher Bitfinding retrieved $963,832.

Meanwhile, additional recoveries were made on Base and Arbitrum. However, the rescuers on Arbitrum have chosen to remain anonymous and will forgo their bounties.

To claim their rewards, eligible white hats must complete identity verification, KYC checks, and sanctions screening under Balancer’s SEAL Safe Harbor Agreement. This requirement, Balancer noted, serves to uphold regulatory and operational integrity during the compensation process.

Claim Deadlines and Governance Oversight

Moreover, the proposal sets clear expectations for the next stages. A 180-day claim window will apply to all recipients, including LPs and eligible white hats. After this period expires, any unclaimed funds will become dormant.

Finally, Balancer stated that decisions concerning the reallocation or repurposing of these assets will be entrusted to governance. This framework, in turn, empowers token holders to determine the management of any unused funds.