DeFi Weekly Recap: Balancer Exploit, Stream Finance Woes, RedStone Launch, and Alliance

Friday Nov 7 2025 19:10

Duration

2 min

  1. 1. This Week in DeFi: Key Takeaways

  2. 1.1 Balancer Suffers Massive Exploit

  3. 1.2 Stream Finance Faces Liquidity Crisis and $93M Loss

  4. 1.3 RedStone Launches DeFi Risk Ratings Platform

  5. 1.4 DeFi Protocols Unite to Advocate for Ethereum

This Week in DeFi: Key Takeaways

  • Balancer Exploit: Over $116 million drained due to smart contract vulnerability.
  • Stream Finance Crisis: $93 million loss triggers stablecoin depegging and liquidity freezes.
  • RedStone Risk Ratings: New platform aims to provide data-driven transparency for DeFi protocols.
  • Ethereum Advocacy Alliance: Leading DeFi protocols unite to engage with policymakers.

Balancer Suffers Massive Exploit

Balancer experienced a significant decentralized finance (DeFi) exploit this Monday, resulting in the loss of over $116 million in staked Ether and liquidity pool tokens. The attack targeted Balancer v2 contracts and several forks, exploiting what appeared to be a flaw in smart contract access control. Attackers were able to directly withdraw funds from liquidity pools. The exploit, which initially saw $70 million siphoned, quickly escalated to $116 million, heavily impacting liquid staking assets like Lido’s wstETH and StakeWise’s osETH. In an effort to mitigate losses, Balancer offered a 20% white hat bounty to the perpetrators, while also engaging law enforcement and blockchain forensics experts to identify those responsible.

Stream Finance Faces Liquidity Crisis and $93M Loss

The decentralized protocol Stream Finance disclosed a $93 million loss connected to an external fund manager, causing widespread disruption across the DeFi market. The event triggered stablecoin depegging and liquidity freezes due to the association of assets. DeFi analysts indicated that the Stream Finance collapse had a cascading effect on the DeFi ecosystem, exposing millions to the protocol's synthetic assets. Research from Yields and More revealed that over $284 million in loans and stablecoins were linked to Stream Finance’s xUSD, xBTC, and xETH.

RedStone Launches DeFi Risk Ratings Platform

Modular oracle network RedStone introduced Credora, a DeFi-native risk ratings platform that integrates real-time credit and collateral analytics into protocols like Morpho and Spark. RedStone seeks to offer dynamic risk scoring and default probability data through APIs, aiming to boost data-driven transparency. This platform aligns with a broader industry move toward a lower-risk DeFi ecosystem, where oracles, auditors, and analytics firms collaborate to assess the sustainability of yield and collateral systems.

DeFi Protocols Unite to Advocate for Ethereum

A group of leading DeFi protocols established the Ethereum Protocol Advocacy Alliance (EPAA) to bolster Ethereum's policy representation in Washington. The alliance includes Aave, Uniswap, Lido, Curve, Spark, Aragon, and The Graph. The protocols plan to counter the “outsized influence” of centralized crypto companies in shaping US regulation by directly engaging with policymakers on the technical realities of decentralized infrastructure. The EPAA aims to ensure that on-chain protocols, and not just centralized entities, have a voice in shaping crypto's regulatory future.

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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Written by:

Ava Grace

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