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Balancer has been under intense scrutiny following a massive theft. The DeFi platform, which allows users to trade crypto without intermediaries, was hit hard. In a short time, large amounts of digital coins vanished from multiple shared funds, leaving many users panicked and unsure of what was happening.
The attack exposed a critical system flaw that criminals exploited. As the losses mounted, Balancer scrambled to recover funds and support affected users, including enlisting ethical hackers to assist.
The Early November Hack #
The hack occurred in early November, resulting in the loss of over $100 million in crypto. It began with three unusually large transactions of well-known coins like Ethereum and its variants. These assets were swiftly drained from Balancer pools, where users collectively pool funds to facilitate trading.
Investigators discovered a software vulnerability that allowed the attacker to execute an unauthorized command, granting access to funds that weren’t theirs. Balancer gave the hacker two days to return the funds voluntarily while also offering a bounty for white-hat hackers—ethical experts who help recover stolen crypto. This reward was aimed at reclaiming a significant portion of the stolen assets.
Balancer Delivers Good News #
There’s positive news now: approximately $8 million in recovered crypto is being distributed to victims. In total, over $28 million has been rescued, thanks to the efforts of white-hat hackers and Balancer’s internal team.
Only users who were directly affected by the compromised pools will receive compensation. The distribution is based on the amount of tokens each user held in the pools at the time of the attack. Additionally, the six white-hat hackers who secured nearly $4 million will receive a 10% reward of the amount they recovered.
This recovery plan aims to restore user trust after a severe blow, demonstrating that swift action and collaboration can make a difference. It also underscores how costly flaws in digital systems can be.