Two members of the Balancer protocol community have submitted a proposal detailing a reimbursement plan for a portion of funds recovered following the $116 million exploit in November 2025.
Funds Recovered
Of the $116 million stolen, $28 million has been recovered through the efforts of white hat hackers, internal rescuers, and StakeWise, an Ether (ETH) liquid staking platform. The proposal specifically addresses the $8 million recovered by white hat hackers and internal teams, while the remaining ~$20 million recovered by StakeWise will be distributed separately to its users.
Proposed Distribution Mechanism
The community authors suggest a non-socialized reimbursement, meaning funds are distributed only to the specific liquidity pools that suffered losses. Payments would be made on a pro-rata basis, calculated according to each holder’s share in the pool as represented by Balancer Pool Tokens (BPT).
Importantly, reimbursements are recommended to be paid in-kind, allowing victims to receive compensation in the exact tokens they lost, reducing potential price mismatches between different digital assets.
Sophisticated Hack Despite Multiple Audits
The November attack has been described as one of 2025’s most sophisticated crypto exploits by Deddy Lavid, CEO of blockchain cybersecurity firm Cyvers. Despite Balancer’s 11 smart contract audits by four different security firms, the platform was successfully compromised.
The post-mortem report identified the root cause: a flaw in the rounding function used in EXACT_OUT swaps within Balancer’s Stable Pools. The attacker manipulated the function to round values up instead of down, combining this with a batched swap—a single transaction with multiple actions—to drain funds from the pools.
Implications for Crypto Security
This incident highlights ongoing vulnerabilities in blockchain protocols, emphasizing the limitations of smart contract audits. Even extensively audited platforms remain at risk, underlining the importance of both proactive security measures and responsive recovery mechanisms.