Progress on Balancer security incident: DAO begins discussion on $8 million recovery plan

According to ChainCatcher, citing CoinDesk, weeks after the Balancer v2 vault suffered a major exploit resulting in the loss of over $110 million in funds, Balancer DAO has begun discussing a plan to allocate approximately $8 million in recovered assets to affected LPs.

The proposal includes structured rewards for white hat hackers and compensates users based on snapshot data of user pool assets at the time of the exploit, in line with the "Safe Harbor Agreement." This agreement stipulates a maximum bounty of $1 million per incident, and white hat hackers must complete comprehensive KYC and sanctions screening. Several anonymous rescuers on Arbitrum have waived their bounty claims. The recovered tokens span networks such as Ethereum, Polygon, Base, and Arbitrum, and liquidity providers will be compensated proportionally according to the original tokens provided and by pool. A claims mechanism is currently under development, and if the proposal passes, users will need to accept updated terms of use.

Additionally, $19.7 million worth of osETH and osGNO recovered by StakeWise will be handled separately; $4.1 million recovered internally in collaboration with Certora is not eligible for bounties due to a prior agreement. This exploit was caused by a smart contract flaw, marking Balancer's third major security incident and resulting in the total value locked (TVL) plummeting from approximately $775 million to $258 million, while the value of the BAL token also dropped by about 30%.