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Balancer Introduces $8 Million Payout Plan After $116 Million Hack Fallout
Key Takeaways
- Two Balancer community members proposed a plan to distribute $8 million recovered from the $116 million November exploit;
- The payout targets only affected liquidity pools, with funds divided based on each holder’s Balancer Pool Tokens;
- Reimbursements will be made in the same tokens lost, as Balancer reviews a hack that bypassed 11 prior security audits.
Two contributors from the Balancer protocol have introduced a plan to distribute part of the money recovered after the platform’s $116 million exploit in November.
Roughly $28 million of the stolen amount has been recovered through several efforts, including white-hat hackers, Balancer’s internal rescue teams, and StakeWise, an Ethereum
The current proposal focuses only on the $8 million retrieved by white-hat and internal teams. The nearly $20 million recovered by StakeWise will be managed and returned to its users separately.
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The proposal suggests that compensation should not be spread across all users but instead directed to the specific liquidity pools that were directly affected. Each pool’s recovery would depend on the amount lost, with funds divided according to participants’ shares of Balancer Pool Tokens (BPT).
The authors also recommend that repayments be made in the same digital assets that were lost, rather than using other tokens.
According to Balancer’s GitHub records, its code has undergone 11 audits by four separate blockchain security firms. Despite those reviews, the protocol was still exploited.
On November 5, Balancer published a post-mortem report identifying the vulnerability. The breach involved manipulating a rounding function used in EXACT_OUT swaps within its Stable Pools.
The function normally rounds prices down, but the attacker found a way to make the system round values up instead.
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