Balancer, a prominent decentralized finance protocol, has been hit by a monumental hack, resulting in more than $128 million worth of cryptocurrency being drained from its pools. The exploit, one of the largest in DeFi history, leveraged a rounding error in the smart contracts of
Balancer V2 and spanned across multiple Ethereum chains. It has brought to light the inherent vulnerabilities of DeFi and reignites the debate on the sector’s trust and security. Despite undergoing eleven rigorous audits, neither the flaw nor the potential for massive fund drain was detected.
Gnosis, one of the affected protocols involved, conducted a hard fork to recover approximately $9 million lost, a move that drew criticism from some in the crypto community who see it as undermining the core feature of blockchain technology: immutability. As the impact of the exploit reverberates throughout the crypto ecosystem,
Balancer identified the rounding error as the root cause and began recovery efforts, including plans to distribute $8 million in recovered funds to affected investors. The hacker, having realised over $20 million from the exploit, subsequently lost a significant amount due to StakeWise exploiting a loophole and recouping some of the stolen funds.
While the event may have dented confidence in DeFi protocols, the response from
Balancer and others affirms their commitment to improving security and bolstering trust amongst users. This large-scale exploit underscores the need for more robust security measures and risk mitigations within DeFi, signaling a more cautious approach to future operation, innovation and adoption in the space.
Balancer News Analytics from Thu, 13 Feb 2025 08:00:00 GMT to Sun, 11 Jan 2026 13:00:14 GMT -
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