Balancer Exploit Drains $128M, 20% Bounty Offered
Balancer exploit has drained over $128 million from Balancer v2 liquidity pools across Ethereum, Polygon, Base and Sonic networks. The attacker exploited a smart contract vulnerability in the manageUserBalance function to perform unauthorized withdrawals, siphoning tokens such as 6,590 WETH, 6,850 osETH, 4,260 wstETH and additional staked ETH assets. Balancer’s security team confirmed the breach and, in an unprecedented move, offered the hacker a 20% bounty on returned funds within 48 hours before involving law enforcement and blockchain forensics. This Balancer exploit highlights persistent DeFi security risks and may prompt enhanced audits of automated market makers. Traders should monitor BAL price volatility, potential liquidity outflows, rising gas fees and risk premiums as DeFi security concerns escalate.
Bearish
The exploit undermines confidence in Balancer’s protocol and DeFi security overall. In the short term, BAL is likely to face selling pressure as traders adjust risk exposure, driving price downward. Liquidity outflows may increase gas fees and widen spreads, adding to market stress. Long term, BAL could recover if the vulnerability is patched and bounties reduce losses, but reputational damage may sustain a risk premium. Overall, the news is bearish for BAL price.