Balancer Plans $8 Million Distribution After $116 Million Hack
TLDR
Balancer DAO is distributing $8 million in recovered funds to victims of its $116 million November hack
The recovered funds come from white hat hackers and internal rescue teams, with another $20 million recovered separately by StakeWise
Victims will receive reimbursements in the same tokens they lost, calculated on a pro-rata basis according to their share in affected liquidity pools
The hack exploited a rounding function flaw in Balancer’s smart contracts, despite 11 previous security audits by four different firms
Balancer’s total value locked dropped from $775 million to $258 million after the exploit, while the BAL token lost 30% of its value
The Balancer protocol community has submitted a proposal to distribute $8 million in recovered funds to victims of a November hack that drained $116 million from the platform. Two community members outlined the distribution plan on Thursday.
A new discussion is now live on the Balancer Forum for feedback, outlining a suggested framework for redistributing assets recovered during the recent attacks on v2, including both whitehat rescues and internal recovery efforts.
It proposes a method for reimbursing LPs in pools… pic.twitter.com/isTfmuTs4V
— Balancer (@Balancer) November 27, 2025
The recovery effort involved multiple parties working to retrieve stolen funds. White hat hackers and internal rescue teams recovered about $8 million of the stolen assets. StakeWise, an Ether liquid staking platform, separately recovered nearly $20 million in osETH and osGNO tokens.
The current proposal only covers the $8 million recovered by white hat hackers and internal teams. StakeWise will handle the distribution of its recovered funds directly to its users through a separate process.
The distribution plan follows a non-socialized approach. This means funds will only go back to the specific liquidity pools that lost them. Victims will receive payments based on their pro-rata share in each affected pool, as represented by their Balancer Pool Tokens.
Reimbursements will be paid in-kind using the same tokens that were originally lost. This approach prevents price mismatches that could occur if victims received different tokens than they deposited. The recovered tokens span multiple networks including Ethereum, Polygon, Base and Arbitrum.
The Technical Details of the Exploit
The hack occurred on November 3 and targeted a rounding function in Balancer’s Stable Pools. The function was designed to round down when calculating token prices during EXACT_OUT swaps. The attacker found a way to manipulate this calculation to round up instead.
The attacker combined this vulnerability with a batched swap technique. A batched swap allows multiple actions to occur in a single transaction. This combination allowed the hacker to drain funds from multiple Balancer pools.
Balancer released a post-mortem report on November 5 explaining the root cause. The platform had been audited 11 times by four different blockchain security companies. Despite these audits, the vulnerability was not discovered beforehand.
The recovered funds require a claim mechanism that is currently being developed. Users will need to accept Balancer’s updated terms of use to receive their reimbursements. The DAO must approve the distribution plan through a voting process.
White Hat Bounties and Recovery Efforts
The distribution plan includes structured payments for white hat hackers who helped recover funds. Balancer’s Safe Harbor Agreement sets rules for ethical hackers. The framework caps bounties at $1 million per incident.
White hat participants must complete full know-your-customer checks and sanctions screening. Several anonymous rescuers on Arbitrum declined to identify themselves. These individuals waived their bounty claims by remaining anonymous.
An additional $4.1 million was recovered through coordinated efforts with Certora, another white hat hacker. These funds are not eligible for bounty payments due to existing service agreements. The internal recovery teams also do not qualify for bounty rewards.
The exploit marks Balancer’s third major security incident. The platform’s total value locked fell from $775 million to $258 million after the attack. The BAL token lost approximately 30% of its value following the exploit.
The post Balancer Plans $8 Million Distribution After $116 Million Hack appeared first on CoinCentral.
Filed under: News - @ November 28, 2025 8:28 am