Balancer Recovers $45.7 Million After $121 Million Hack—But BAL Token Declines 24%

Following a major exploit on November 3rd, Balancer managed to recover $45.7 million of the $121.1 million stolen. Despite this recovery, the BAL token has fallen by 24% compared to pre-attack levels. This article examines the recovery efforts and ongoing challenges faced by the DeFi protocol.

Key Takeaways

Coordinated actions from whitehat hackers and emergency decentralized autonomous organization (DAO) responses safeguarded or retrieved $45.7 million of the stolen $121.1 million, marking a 38% recovery rate.
The BAL token experienced a drop of 23.81% following the exploit, decreasing from approximately $1.00 to $0.7487, despite the substantial recovery efforts.

Balancer released a detailed post-mortem today, explaining how coordinated emergency responses led to the protection and recovery of $45.7 million after a significant exploit on November 3. Nevertheless, BAL token holders are facing losses, with the token currently trading 24% lower than pre-exploit levels, despite the success in fund recovery.

The crisis management faced by the DeFi protocol demonstrated effective measures in blockchain security. Just minutes after the attack was noticed at 7:46 UTC, whitehat rescuers operating under the SEAL Safe Harbor Agreement began actions to counteract the attackers across several blockchains.

Balancer recovers $45.7M after $121M hack—But BAL stays down 24%

Swift Recovery by StakeWise

The StakeWise DAO executed the most substantial recovery operation within just 90 minutes of the hack. Utilizing their multisig governance, they managed to retrieve 5,041 osETH (valued at around $19 million) and 13,496 osGNO (worth $1.9 million). This effort corresponded to a recovery rate of 73.5% of the stolen osETH and a full recovery of the osGNO.

Additionally, SEAL Safe Harbor whitehats successfully recovered an extra $4.6 million from various assets across Ethereum, Polygon, Base, and Arbitrum. Specifically, Bitfinding managed to outmaneuver the attackers on Ethereum Mainnet, reclaiming $964,000 from various staked ETH tokens.

Emergency actions taken to pause vulnerable V6 Composable Stable Pools safeguarded an additional $19.3 million in liquidity. Major liquidity providers, such as Crypto.com and Ether.fi, were able to withdraw their funds safely after such emergency measures were implemented.

Market Concerns Despite Recovery Success

Currently, the BAL token is trading at $0.7487, reflecting a 23.81% decrease from its pre-exploit value near $1.00. Although the token saw a slight bounce of 5.51% today, it remains deeply oversold, with a relative strength index (RSI) of 35.64.

The ongoing decline in BAL’s price indicates that investors are more concerned about the $75.4 million still in the attackers' possession than the $45.7 million successfully retrieved. Balancer is dedicated to pursuing recovery through coordination with law enforcement and other legal means, although such processes can take considerable time.

To manage the returned funds, Balancer plans to distribute the recovered amounts on a pool-by-pool basis through governance proposals. Liquidity providers (LPs) will need to actively claim the recovered assets, as automatic distributions will not be provided.

Moreover, Balancer continues to accelerate its transition from the vulnerable V2 architecture. The team has disabled all gauges related to the affected pools and halted CSPv6 factory contracts to avoid the creation of new susceptible pools. Importantly, Balancer V3 remains entirely unharmed due to its security-focused architectural approach.