Balancer Hack Update: StakeWise Retrieves $19.3M From Multi-Million Dollar Exploit

StakeWise has successfully recovered 19.3 million osETH stolen funds during the recent Balancer hack. This is a welcome relief for StakeWise following one of the largest hacks in the DeFi world this year.

 $19.3M Recovered From Balancer Hack by StakeWise

As per the data obtained from EmberCN, StakeWise has succeeded in recovering 19.3 million dollars of the stolen money related to the Balancer hack that occurred in the early hours of Monday. StakeWise initiated a contract call to retrieve 5,041 osETHs. This action decreased the stolen amount from 117 million dollars to 98 million dollars.

The hacker had been converting LSTs to ETH, little by little. As reported, over half of stolen funds have been transferred to the Ethereum network so far. 

The hacking of the V2 vaults and liquidity pools at Balancer happened on November 3. The attacker took advantage of a vulnerability in the way smart contracts interacted with each other during pool setup. Due to “improper authorization and handling of callbacks”, the attacker was able to control vault calls. This allowed unauthorized swaps and balance modifications between bonded pools in a matter of minutes. 

Reports from blockchain security companies including PeckShield and Nansen also determined the attack was technical, rather than a hack or theft of the private key. The assault managed to steal some $110–$116 million across Ethereum, Base and other chains.

Experts say Balancer’s composable design amplified the vulnerability. Similar issues have been observed in other automated market makers (AMMs).

Market Value Suffers Losses Amid Exploit

Data from DeFiLlama showed Balancer’s TVL has collapsed from $442 million to $214.5 million in less than a day. This is essentially more than half of the protocol’s on-chain liquidity.

Balancer’s native token (BAL) fell by another 8% over 24 hours. This comes as the crypto market is also in a downturn. The crypto market capitalization dropped to a five-month low of $3.45 trillion. Bitcoin and Ethereum also fell by 18% and 27% respectively, over the past month.

The team shared a statement in reaction to the Balancer Hack. They also offered a 20% bounty to the entity behind the attack.

“We’re working closely with leading security researchers to fully understand the vulnerability and will release a complete post-mortem once the investigation concludes,” the Balancer team wrote.