Balancer Proposes $8M Reimbursement Plan After $128M DeFi Exploit

Balancer has unveiled a plan to compensate users following a major exploit this month that drained more than $128 million from its V2 liquidity pools across multiple blockchains, marking one of the largest decentralized finance breaches of the year.

A proposal published Thursday by two community members lays out a framework to return roughly $8 million in recovered assets to affected liquidity providers.

The funds come from a mix of whitehat interventions and internal recovery efforts carried out during and after the attack. Community feedback is now being sought before any final decision is made.

Balancer Recovers $28M After Exploit Forces Protocol Shutdown

The exploit affected pools on five different networks and forced Balancer to pause portions of the protocol as security teams and outside researchers rushed to safeguard vulnerable assets.

In total, around $28 million of the stolen funds were eventually recovered through coordinated rescue efforts involving independent security researchers, Balancer’s internal team, and third parties.

Under the proposal, the reimbursement plan will cover only the $8 million rescued directly by whitehats and Balancer’s internal operations.

The remaining $19.7 million, held in osETH and osGNO, will be reimbursed separately through the governance process of Ethereum liquid staking protocol StakeWise, which has committed to returning funds to its impacted users.

The framework follows Balancer DAO’s Safe Harbor Agreement, which outlines the terms for whitehat recoveries and compensation.

Bounties are issued in the same assets recovered and cannot be taken directly from user funds.

Whitehat participants are set to receive a 10% bounty, capped at $1 million per operation, once they complete identity verification, compliance screening, and other legal checks.

Here's everything you need to know about the Balancer Hack:

1. The attack targeted Balancer's V2 vaults and liquidity pools, exploiting a vulnerability in smart contract interactions. Preliminary analysis from on-chain investigators points to a maliciously deployed contract that… pic.twitter.com/udAM4hB0OD

— Adi (@AdiFlips) November 3, 2025

Whitehat ‘Anon #1’ Led Balancer Rescue With $2.7M Recovery on Polygon

The proposal identifies six whitehat actors who collectively recovered about $3.9 million across several networks.

One hacker, referred to as “Anon #1,” accounted for the largest single recovery after securing $2.68 million in assets on Polygon, including WPOL, MaticX, TruMATIC, and stMatic tokens.

Balancer also coordinated internal rescue operations with security firm Certora, recovering an additional $4.1 million from metastable pools on Ethereum, Optimism, and Arbitrum that were deemed at risk but had not yet been exploited.

To claim funds, affected users will be required to digitally accept new terms and release Balancer Labs, its DAO, and related entities from legal liability tied to the incident.

A 180-day claim window is included, after which any unclaimed funds may be reassigned through future governance votes.

Crypto investors lost over $2.2 billion to hacks, scams, and breaches in the first half of 2025, driven largely by wallet compromises and phishing attacks, according to CertiK’s latest security report.

Wallet breaches alone caused $1.7 billion in losses across just 34 incidents, while phishing scams accounted for over $410 million across 132 attacks.