- A newly discovered vulnerability posed a threat to Balancer V2 pools.
- Balancer’s TVL declined as prices fell.
On August 22, balancers [BAL] A security vulnerability has been identified affecting multiple V2 pools. Therefore, Balancer asked customers to withdraw their tokens as the vulnerability posed a significant risk for millions of dollars.
Is your portfolio green? Check out the BAL Earnings Calculator
A balancing act
The decentralized protocol, which facilitates trading via user-provided liquidity pools, was notified of a bug in its high-yield boosted pools on Aug. 22.
This disclosure prompted the protocol managed by BAL token holders to issue a lockdown, activate Balancer’s crisis response team, and halt numerous pools to prevent a potential drain.
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NOTE:
Most funds on Balancer are safe.
Only 1.4% of total TVL is at risk and only boosted pools are affected.
Several mining pools have been paused to mitigate risk and will continue to do so. Users are advised to withdraw liquidity as soon as possible.https://t.co/xcT1OfALs2
— Balancer (@Balancer) August 22, 2023
According to Balancer’s latest estimate, approximately 1.4% of the total locked value, equivalent to approximately $10 million, remained at risk as of press time.
Some wstETH and stMATIC pools were also affected during this period. Additionally, via Twitter, Lido recommended users to withdraw liquidity from these mining pools as soon as possible.
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Balancer has received a report of a critical vulnerability affecting certain pools, including some (w)stETH and stMATIC pools.
Users are advised to withdraw liquidity as soon as possible. https://t.co/ogEobqGd56
— Lido (@LidoFinance) August 22, 2023
At the time of writing, the log contained no updates on the nature of the vulnerability or what actions were taken to remediate the state of the various affected pools.
Status of the log
A look at the code commits made on the Balancer GitHub showed that development activity for Balancer had slowed at the time of publication. For this reason, the security of various pools may have been overlooked in the protocol.
Code commits for the protocol are down 24.4% over the past week, according to Token Terminal. The protocol’s Total Value Locked (TVL) is also down 9% over the past seven days.
Source: Token Terminal
Realistic or not, here is BAL’s market cap in BTC terms
Likewise, the price of BAL has fallen significantly over the past week. The speed of the token also dropped drastically, suggesting that the frequency with which the token was traded had dropped sharply.
At press time, BAL was trading at $3.46.
Source: Santiment
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