Balancer DAO proposes $8M recovery plan to compensate LPs after $110M v2 vault exploit

Balancer DAO has proposed an approximately $8 million recovery plan after a major exploit drained about $110 million from Balancer v2 vaults. The proposal would distribute recovered assets to affected liquidity providers (LPs) using pool-specific snapshots taken at the time of the exploit. It includes structured payouts to white‑hat rescuers under the protocol’s Safe Harbor policy (capped at $1M per incident, conditional on KYC and sanctions checks). Recovered tokens span multiple chains — Ethereum, Polygon, Base and Arbitrum — and some anonymous rescuers on Arbitrum have waived bounty claims. Separate recoveries will be handled independently: StakeWise recovered $19.7M in osETH/osGNO and another $4.1M was recovered with Certora; these funds may be excluded from the DAO’s bounty distribution due to prior agreements or ineligibility. The exploit stemmed from a smart‑contract vulnerability and is Balancer’s third significant security incident, causing TVL to fall from roughly $775M to $258M and the BAL token to drop about 30%. If approved, the proposal will require affected users to accept updated terms and will implement a formal claims mechanism. Traders should expect elevated volatility in BAL and affected LP tokens, potential withdrawal or listing restrictions on some venues, and continued on‑chain monitoring as funds are traced or recovered.