Balancer Exploited for Nearly $900,000 After Severe Vulnerability Found

Just days after discovering vulnerabilities in several pools on its platform, the DeFi protocol Balancer has become the latest target of hackers.

Exploit Overview:

• Initial Losses: On the evening of 27/08, Balancer confirmed a significant exploit, resulting in nearly $900,000 in damages. Blockchain security expert Meier Dolev traced the hacker’s wallet, revealing two significant DAI transfers: $636,812 and $257,527.
• Continued Operations: The attacker continued their operations, affecting approximately $900,000, with more than $600,000 moved to a specific address: 0xB23711b9D92C0f1c7b211c4E2DC69791c2df38c1.

Recent Developments:

• Updated Loss Estimates: On 28/08, Peckshield, a technical auditing firm, reported that the damage from Balancer's vulnerability might reach $2.1 million. This figure is significantly higher than the previous estimate of "$565,199 (0.08% of total TVL)" provided by Balancer.
• Impact Across Networks: The exploit affected multiple pools across Ethereum, Fantom, and Optimism.

Balancer's Response:

• Security Alert: Balancer issued a security alert stating, "The platform is no longer safe. While we have minimized the damage, we cannot pause the affected pools. Users should withdraw their funds from these pools immediately."
• Initial Detection: A week prior, Balancer identified a critical vulnerability impacting several pools, initially estimating that 1.4% ($5 million) of assets were at risk. Despite continuous user alerts to withdraw funds, some assets across Ethereum, Polygon, Arbitrum, Optimism, Avalanche, Gnosis, Fantom, and zkEVM remained vulnerable.

Community and Market Reactions:

• User Action: As of 25/08, Balancer reported that 99.7% of initially vulnerable liquidity was secured. However, 0.08% of the total TVL ($565,199) remained at risk, with users advised to withdraw immediately.
• Token Price Impact: Since the vulnerability was discovered on 22/08, the price of BAL has fluctuated, hitting a new low of $3.2 on 18/08 and currently trading around $3.5.

Official Statements:

• Peckshield's analysis and Balancer's continuous updates underscore the need for immediate user action to secure remaining at-risk assets.

Market Chart:

• BAL/USDT on Binance: The 1D chart for the BAL/USDT pair as of 09:17 AM on 28/08/2023.

This situation highlights the ongoing challenges DeFi platforms face in maintaining security and the importance of prompt user response to vulnerabilities.