Share this article
Balancer DAO Starts Discussing $8M Recovery Plan After $110M Exploit Cut TVL by Two-Thirds
The recovered tokens, spanning multiple networks and assets, will be paid out in the same tokens as originally provided, with a claim mechanism being developed.
Updated Nov 28, 2025, 2:11 p.m. Published Nov 27, 2025, 9:39 p.m.
Make us preferred on Google
What to know:
- Balancer DAO plans to distribute $8 million in recovered assets to affected liquidity providers (LPs) following at least $110 million exploit, with a structured payout for white hats and a reimbursement mechanism for users.
- The recovered tokens, spanning multiple networks and assets, are proposed to be paid out in the same tokens as originally provided, calculated on a pro-rata basis, with a claim mechanism being developed.
- The exploit, caused by a smart contract flaw, marks Balancer's third major security incident and has led to a significant decline in total value locked (TVL) and the protocol's BAL token value.
Weeks after suffering a major exploit that drained over $110 million from its Balancer v2 vaults, Balancer DAO has begun discussing a plan to distribute roughly $8 million in recovered assets to affected liquidity providers (LPs).
The funds were rescued by whitehat actors and internal teams shortly after the attack occurred on November 3. According to a request for comment (RFC) posted by DAO contributor Xeonus, 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 exploit.
STORY CONTINUES BELOW
These measures align with Balancer’s previously adopted Safe Harbor Agreement, which outlines rules for ethical hackers recovering funds.
The Safe Harbor framework caps bounties at $1 million per incident and requires full know-your-customer (KYC) and sanctions screening from participating whitehats. Notably, several anonymous rescuers on Arbitrum declined to identify themselves, waiving any bounty claim.
Recovered tokens span networks like Ethereum, Polygon, Base and Arbitrum, and include assets such as WETH, rETH, WPOL and MaticX. Liquidity providers will receive payments in the same tokens they originally provided, calculated on a per-pool, pro-rata basis.
A claim mechanism is being developed and will require users to accept Balancer’s updated terms of use if the DAOs move the approval to voting, and that’s approved.
While $8 million is being redistributed through the DAO, another $19.7 million in osETH and osGNO was rescued by StakeWise (a whitehat hacker) and will be handled separately. A further $4.1 million was recovered internally through coordinated efforts with another whitehat, Certora, but is ineligible for whitehat bounties due to prior service agreements.
The exploit, caused by a flaw in Balancer’s smart contract access controls, marks the protocol’s third major security incident.
Total value locked (TVL) on Balancer has plunged from around $775 million to $258 million after the exploit, while the protocol’s BAL token lost around 30% of its value.
AI Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards. For more information, see CoinDesk's full AI Policy.
More For You
KuCoin captured a record share of centralised exchange volume in 2025, with more than $1.25tn traded as its volumes grew faster than the wider crypto market.
What to know:
- KuCoin recorded over $1.25 trillion in total trading volume in 2025, equivalent to an average of roughly $114 billion per month, marking its strongest year on record.
- This performance translated into an all-time high share of centralised exchange volume, as KuCoin’s activity expanded faster than aggregate CEX volumes, which slowed during periods of lower market volatility.
- Spot and derivatives volumes were evenly split, each exceeding $500 billion for the year, signalling broad-based usage rather than reliance on a single product line.
- Altcoins accounted for the majority of trading activity, reinforcing KuCoin’s role as a primary liquidity venue beyond BTC and ETH at a time when majors saw more muted turnover.
- Even as overall crypto volumes softened mid-year, KuCoin maintained elevated baseline activity, indicating structurally higher user engagement rather than short-lived volume spikes.
More For You
Tristan Thompson launches prediction market turning NBA stats into stock
NBA veteran Tristan Thompson launched basketball.fun, a new prediction market platform that turns top athletes into tradable assets.
What to know:
How it works: The platform differentiates itself from standard betting by treating the NBA's top 100 players as individual financial assets to collect.
- Users can buy and open "packs" of players, mimicking the nostalgic experience of buying physical trading cards.
- Player "share prices" luctuate based on real-time performance, rising if a player records a triple-double or dropping if they struggle after an injury.
- Users can trade these player shares on a secondary marketplace.
Top Stories
