Balancer DAO Plans $8 Million Payout to All Liquidity Providers Affected By Recent V2 Exploit

Balancer DAO plans to return $8 million in recovered tokens to affected liquidity providers.

Whitehat actors receive 10% of recovered assets under Safe Harbor rules.

Users will claim funds through a new interface after governance approves the plan.

Balancer DAO is moving forward with a plan to return $8 million in recovered assets to affected liquidity providers. The funds were secured after a major exploit drained over $110 million from Balancer v2 vaults on November 3. Whitehat actors and internal teams recovered the assets shortly after the attack, preventing further losses.

Recovered tokens cover multiple networks, including Ethereum, Polygon, Base, and Arbitrum. They consist of WETH, rETH, WPOL, and MaticX. Balancer plans to reimburse liquidity providers in the same tokens they originally supplied, calculated on a pro-rata basis per pool. A dedicated claim mechanism is under development, which will require users to accept updated terms before receiving payouts.

Whitehat Participation and Safe Harbor Framework

Balancer’s Safe Harbor Agreement guides the payout process for whitehat actors. Bounties are capped at $1 million per incident, and participants must complete KYC and sanctions screening. Several rescuers on Arbitrum chose to remain anonymous, waiving their bounty claims. Whitehats who contributed to the recovery will receive 10% of the assets they helped secure, paid in-kind. Internally recovered funds, coordinated with Certora, will bypass the bounty system and go directly to affected pools due to prior service agreements.

The approach ensures ethical recovery while protecting user funds. Balancer emphasizes that recovered assets will only return to the original pools, avoiding socialized losses. Snapshot data taken before the exploit defines each user’s share.

Scale of Losses and Additional Recoveries

The November 3 exploit exploited a flaw in Balancer’s smart contract access controls, allowing attackers to manipulate pool token balances. Over $128 million was drained across Ethereum and multiple layer-2 networks within minutes. Most stolen assets moved through mixers, but rapid whitehat intervention contained the impact. Berachain fully recovered $12.8 million lost in the Balancer V2 exploit, showing strong security action.

StakeWise recovered approximately $19.7 million in osETH and osGNO, which will be handled separately. Internal recovery teams secured an additional $4.1 million in coordination with Certora. Total value locked on Balancer dropped from $775 million to $258 million, while BAL token value fell roughly 30%.

Next Steps and Governance Review

Balancer’s proposal sets the stage for community voting on the reimbursement plan. Users will access the claim interface once the proposal passes governance review. Any unclaimed funds after the claim window will be addressed through a subsequent vote. The plan reflects Balancer’s first formal step in managing the losses from this year’s largest decentralized finance breach.

The DAO’s structured approach combines recovered assets, whitehat coordination, and governance oversight. This process ensures transparency while prioritizing the original liquidity providers affected by the exploit.