On August 22, Balancer Labs announced that it had received a “critical vulnerability report affecting a number of V2 pools.”
The company went on to warn that it has taken action but the funds may be at risk.
“Contingency measures have been put in place to secure much of the TVL but some funds remain at risk.”
Balancer advised users to withdraw from affected liquidity pools immediately.
Another DeFi exploit?
In a follow-up note, the project assured users that “most funds are safe on Balancer.” Only 1.4% of the total locked value is at risk, she added, before confirming that only elevated pools are affected.
“Several mining pools have been paused to mitigate risk and will continue to be so. Users are advised to withdraw liquidity as soon as possible.”
According to DeFiLlama, the Balance V2 TVL was approximately $750 million before the vulnerability was discovered. In the hours since the announcement, Balance V2 TVL is down about 28% to $543 million as liquidity providers have pulled back.
Additionally, some more details have been posted on the Balancer Labs forums. They determined that the vulnerability had not been exploited (at this point) and no funds had been lost.
“We were able to mitigate over 80% of that [pools]; The remaining funds at risk account for about 4% of the balancer TVL.”
The list of affected pools were: Mainnet, Polygon, Arbitrum, Optimism, Avalanche, Gnosis, Fantom, and zkEVM.
No further details were available at the time of writing, but there is hope that Balancer’s quick discovery and decision to warn its users saved them from being exploited into the latest DeFi protocol.
BAL Token Response
Balancer’s native token BAL fell 4% to $3.40 in the hours following the announcement.
However, in the last few hours it managed to recover and trade again at $3.52. The DeFi asset had a rough time for two weeks, falling 18% in two weeks.
Furthermore, it remains battered like its DeFi brethren, with BAL down 95% from its May 2021 all-time high of $74.45.
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