Ethereum Updates: Balancer's $116 Million Breach Exposes DeFi Security Vulnerabilities
- DeFi protocol Balancer suffered a $116M exploit via v2 pool vulnerabilities, draining assets across Ethereum, Arbitrum, and other chains. - Attackers exploited infinite approval flaws in wstETH and other tokens, rapidly transferring stolen funds to new wallets, raising laundering concerns. - Balancer confirmed the breach, advised users to avoid affected pools, while TVL dropped to $678M and BAL token fell over 5%. - Forked projects like Beets Finance also lost $3.5M, with security firms attributing risks
The decentralized finance (DeFi) platform
The exploit took advantage of a vulnerability in Balancer’s v2 pools, enabling unauthorized asset withdrawals through infinite approval mechanisms for tokens like wrapped staked ETH (wstETH). Blockchain data,
Balancer’s technical and security teams have verified the breach, advising users to steer clear of compromised pools and assuring that v3 pools remain unaffected, according to
The cross-chain aspect of the exploit worsened the impact, with further losses reported on forked protocols such as Beets Finance and
In response, Balancer is working with blockchain security professionals to address the vulnerabilities and strengthen protections. The team has indicated that users impacted by the hack might qualify for compensation, although a formal recovery strategy has yet to be announced. This event marks the third major security compromise for Balancer in the past five years, following previous incidents referenced in
The wider DeFi sector has responded with increased vigilance. Experts caution that this breach exposes fundamental risks in liquidity protocols, especially those that depend on interconnected pools and composability. With the global DeFi TVL exceeding $75 billion, specialists emphasize the critical role of secure multi-signature arrangements and hardware wallets to reduce future threats.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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