Balancer DeFi $116 Million Exploit Post-Mortem: Analysis and Recovery Efforts

Wednesday Nov 5 2025 20:00

Duration

2 min

  1. 1. Balancer DeFi Exploit Post-Mortem: Analyzing the Loss and Recovery Efforts

Balancer DeFi Exploit Post-Mortem: Analyzing the Loss and Recovery Efforts

The team behind decentralized finance (DeFi) protocol Balancer published a preliminary post-mortem report on Wednesday, detailing the cause of the exploit that siphoned $116 million across DeFi markets. According to the report, Balancer was hit by a sophisticated code exploit on Monday that affected Balancer v2 Stable Pools and Composable Stable v5 pools, while all other pool types remained unaffected. The hacker used a combination of BatchSwaps, which allow the user to bundle multiple actions in a single transaction, including flash loans — short-term loans borrowed and repaid within the same transaction — and an exploit of the upscale rounding function that affects EXACT_OUT swaps in the Stable Pools. The rounding function is intended to round down when token prices are an input. However, the hacker was able to manipulate these rounding values, and in conjunction with the BatchSwap feature, drained funds from the stable pools. The team wrote: "In many instances, the exploited funds remained within the Vault as internal balances before being withdrawn in subsequent transactions." The hack serves as a stark reminder that hot wallets, liquidity pools, and on-chain funds exposed to the internet are vulnerable to evolving cybersecurity threats from malicious actors, prompting crypto users and blockchain developers to exercise caution in protecting funds.

Related Articles:

  • Balancer audits under scrutiny following $100M+ exploit
  • Balancer responds to the $116 million hack with the help of the crypto industry
The hackers were likely skilled professionals who prepared for months before executing their attack, using a series of 0.1 Ether (ETH) Tornado Cash deposits to fund the attack to avoid detection, Cointelegraph previously reported. Balancer worked with cybersecurity partners and crypto protocols to claw back or freeze a portion of the stolen funds, including 5,041 StakeWise Staked ETH (osETH), valued at approximately $19 million, and 13,495 osGNO tokens valued at up to $2 million. The team has paused all affected pools and disabled the creation of new “vulnerable” pools until the security issue is fully resolved. Balancer has offered a 20% white hat bounty to ethical hackers and the perpetrator for the return of the stolen funds, but no one has claimed the bounty as of this writing.

Magazine Feature:

  • ‘SEAL 911’ team of white hats formed to fight crypto hacks in real time

Risk Warning: This article is provided for informational purposes only and does not constitute investment advice, investment research, or a recommendation to trade. The views expressed are those of the author and do not necessarily reflect the position of Markets.com. When considering shares, indices, forex (foreign exchange), and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and may not be suitable for all investors. Leveraged products can result in capital loss. Past performance is not indicative of future results. Before trading, ensure you fully understand the risks involved and consider your investment objectives and level of experience. Cryptocurrency CFD trading restrictions may apply depending on jurisdiction.

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Ava Grace

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