⇓ Balancer Battles Exploits, Recovers Funds Amid Trust Dilemmas in Crypto Community

Balancer, a renowned DeFi protocol, recently experienced multiple serious exploits. Despite undergoing 11 audits, a smart contract mishap allowed the exploits to occur, resulting in the theft of around $128 million. There is speculation that the hacker has already started offloading the stolen assets. The hacked amount is among the most substantial ever seen in blockchain history. The exploits revealed a hidden flaw in Balancer’s smart contracts (V2) and unfolded in less than 30 minutes, raising concerns about DeFi security.
The company identified a rounding error as the root cause of the issue and Berachain stepped in to halt its network in response to the exploit and execute an emergency hard fork. The forensic research shows that the hack wasn't a spontaneous act but entailed months of planning. A few hours after the hack, Balancer managed to recover roughly $19.3M. StakeWise also figured out a loophole and managed to take back $21M from the assailant.
Amid these cybersecurity concerns, further doubt has been cast on the role and value of audits for DeFi projects. The Balancer exploit has indeed redefined DeFi risks and has the crypto community divided on trust implications. For the time being, Balancer has launched a whitehat recovery operation and transferred approximately $4.1 million to an escrow account.

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