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Balancer vulnerability: $200 million gone from protocol

by Tim

Following the announcement of a vulnerability affecting the majority of its liquidity pools, Balancer saw more than $200 million disappear, or around 20% of its TVL. The team reacted quickly and the fire is now contained. We tell you all about it.

A flaw well contained by Balancer

This is a new blow for one of the largest decentralized finance protocols (DeFi). At the end of the day, on Tuesday 22 August 2023, the Balancer team announced that it had “received a critical vulnerability report affecting a number of liquidity pools”.

In a statement published on its blog, Balancer calls on users “to immediately withdraw their funds from the LPs concerned”. In the space of less than 24 hours, nearly $200 million has been lost, representing just over 20% of the TVL (Total Value Locked).

Despite this, the team is reassuring that “this vulnerability was not exploited and no funds were lost”. Around 80% of liquidity pools have already been corrected, while only 4% of TVL is at risk.

Although many users pointed out that this vulnerability had been present in the code for more than two years, the majority of the community praised Balancer’s speed of execution and good crisis management.

As soon as the wallet is connected to the protocol interface, users are informed if they are providing liquidity to a high-risk pool. Moreover, these pools are now labelled “at risk” to prevent anyone from depositing funds in them.

If you are a Balancer user, don’t hesitate to consult the list of pools affected by this flaw. To find out more about how to get your funds out, the protocol team has published a full article on the subject.

For the time being, we have no further details on the nature of the vulnerability. Nevertheless, the contributors to the Balancer protocol have announced that they will publish a report once things have calmed down.

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