balancer

Unknown attacker on December 5, 2025, completely drained the DeFi protocol United States Peg Dollar (USPD) — a stablecoin that positioned itself as a 'regulatory-compliant' asset of the USA. Total losses amounted to $1.03 million.

The attack was made possible due to a critical vulnerability in the smart contract function mint(), which allowed anyone to mint an unlimited number of USPD without corresponding collateral. The exploit lasted only 12 minutes: the hacker created 1,030,000 USPD tokens, exchanged them for USDC and USDT through Curve and Balancer pools, and then withdrew the funds through Tornado Cash.

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📅 November 28 | London, United Kingdom
Balancer, one of the oldest and most emblematic protocols in decentralized finance, finally announced how it will distribute the recovered funds after the exploit that hit the platform months ago and left thousands of users with million-dollar losses.

📖An exploit that drained funds from several vulnerable pools due to a combination of contract failures and sophisticated price manipulation attacks. The hit left an immediate financial void and affected users of varying sizes, from small liquidity providers to whales with millions locked up.
Balancer assured that it would work to recover as much as possible and coordinate with security firms and response teams to track the movements of the stolen funds. Weeks later, a significant portion was finally recovered thanks to multilateral efforts that involved on-chain analysts and direct negotiations with entities linked to the attack.
On that basis, the most recent announcement was the most anticipated: Balancer confirmed that it will distribute the recovered funds according to a proportional scheme based on verified losses. According to The Block, the process will take into account each user's exact exposure to the committed pools and the distribution will be made in ETH, USDC and other tokens depending on the affected asset.
A crucial detail is that only verifiable and recovered funds will be distributed, not compensation for the full value lost, meaning some users will receive less than they expected. The protocol clarified that this is the only realistic way to end the case.
The plan also includes additional public audits to validate the calculation of amounts, as well as the publication of a detailed report that allows users to manually verify their data. The team emphasized that this transparency is key to restoring trust after the attack. The distribution will begin in phases: first to the most affected liquidity providers, then to the rest, with a claim window for any discrepancies.
Despite the controversy, the reality is that this announcement puts an end to one of the most tense chapters of the protocol and defines a precedent for how mature projects should handle security crises.

Topic Opinion:
I think partial recovery is already a huge achievement considering the complexity of modern exploits. However, I also think that larger protocols should start implementing permanent emergency funds that protect users in extreme events.
💬 What do you think of Balancer's plan

Leave your comment...
#balancer #defi #exploit #BlockchainSecurity #CryptoNews $BAL

Balancer is preparing to compensate users affected by one of the most significant attacks in its history. After recovering a portion of the stolen funds, the team has released a detailed plan outlining how reimbursements will proceed and how liquidity providers will be able to claim their losses.

Balancer to Refund $8 Million in Recovered Assets to Affected Users
In its latest proposal, Balancer announced that it will return approximately $8 million worth of tokens to users impacted by the v2 pool exploit. These assets were recovered thanks to coordinated efforts between whitehat hackers and the protocol’s internal rescue teams.
Additionally, a separate tranche of $19.7 million in osETH and osGNO positions held through StakeWise will be restored using an independent recovery process handled directly by StakeWise.

Whitehat Hackers Recovered Funds Before the Attacker Could Reach Them
Moments after the exploit was discovered, several whitehats rushed to drain vulnerable pools before the attacker could — effectively “front-running” the hacker to save the funds. They later returned all captured assets to Balancer and will now receive a reward:
10% of the value they rescued, paid in the same tokens they recovered.
Because the reward process is part of Balancer’s Safe Harbor framework, all whitehat contributors must verify their identity. The Balancer Foundation has already approved them as compliant participants.
Meanwhile, the attacker has begun moving portions of the stolen assets. The exploiter recently transferred 6,999 ETH to a new wallet, indicating readiness for laundering or further obfuscation.

How the Refund Process Will Work
Balancer plans to launch an easy-to-use claims interface similar to its existing withdrawal portal.
The workflow will function as follows:
Users connect the wallet that held BPT at the snapshot block.The system automatically verifies their token balance.Users sign a short legal acknowledgment confirming settlement terms and releasing Balancer from further liability.Once verified, users receive their compensation immediately.
The estimated claim window will span 90 to 180 days.

Any unclaimed funds will later be redistributed based on a future governance vote.

Portal May Launch in December — Community Discussion Underway
The proposal is currently under active discussion. If approved:
the claims portal could go live as early as December or early January.
The StakeWise-specific recovery process will follow an independent timeline.

BAL Token Rises as Market Responds Positively
BAL has gained 2% in the past 24 hours, reflecting investor optimism as Balancer moves toward structured reimbursement and operational recovery.

Exploit Details: Small Calculation Error, Massive Impact
The attack on November 13 exploited minute rounding errors within the Balancer v2 architecture.

The hacker manipulated internal token balances in targeted pools, tricking them into appearing drastically imbalanced — enabling the withdrawal of over $128 million in liquidity.
This incident ranks among the largest ever recorded on the platform.

Conclusion
Balancer is entering a crucial recovery phase. Thanks to whitehat intervention, internal coordination, and a transparent refund plan, liquidity providers now have a realistic path to recovering a significant portion of their losses.

How effectively the protocol manages these reimbursements — and rebuilds trust — may play a defining role in its long-term future in the DeFi ecosystem.

#balancer , #defi , #CryptoSecurity , #Ethereum , #CryptoNews

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