Balancer Community Outlines Fund Distribution Plan Post-Hack Recovery
A proposal from the Balancer community lays out a method for distributing $8 million recouped from a major hack, intended to aid affected liquidity pool holders.
Two individuals from the Balancer community presented a proposal on Thursday detailing a strategy for allocating part of the funds that were recovered following a significant $116 million hack in November. Approximately $28 million from the heist was reclaimed by white hat hackers, internal rescue teams, and StakeWise — a platform for liquid staking of Ether.
Nevertheless, the proposal specifically addresses only the $8 million retrieved by white hat hackers and internal teams, while the nearly $20 million recovered by StakeWise will be distributed to its users separately.
The advocates for this plan suggest that reimbursements should not be socialized, meaning that the funds will be allocated only to the particular liquidity pools that incurred losses, with disbursement being made proportionately according to each holder’s share in the pools, indicated by Balancer Pool Tokens (BPT).
Furthermore, it is proposed that repayments be made in-kind, ensuring that victims receive compensation in the same tokens they initially lost, to prevent price discrepancies between various digital assets.
The Balancer breach has been noted as one of the “most sophisticated” attacks of 2025 by Deddy Lavid, CEO of a blockchain cybersecurity firm, emphasizing the increasing risks for cryptocurrency users as security challenges evolve.
Balancer community proposal to distribute recovered funds. Source: Balancer
Related: Balancer makes last appeal to hacker behind $100M+ exploit
Despite Multiple Audits, Balancer’s Code Was Eventually Compromised
According to Balancer’s GitHub page, the platform’s code has undergone 11 audits by four different blockchain security firms. In spite of the thorough examinations, the platform was still successfully hacked, leading some users to question the actual effectiveness of audits in ensuring code safety.
Balancer provided a post-mortem report on November 5 that analyzed the underlying causes of the hack, which involved a sophisticated exploit targeting a rounding function utilized during EXACT_OUT swaps within its Stable Pools.
The rounding function was intended to round down when inputting token prices, yet the perpetrator exploited this calculation, causing values to round up instead. By combining this weakness with a batched swap — a transaction containing multiple actions — the attacker succeeded in draining funds from Balancer’s liquidity pools.
