Weeks after an attacker exploited an access control vulnerability in Balancer v2 vaults on November 3, 2025, Balancer DAO initiated discussions on November 27 regarding the redistribution of approximately $8 million in recovered assets to affected liquidity providers (LPs).
The funds were secured through coordinated efforts by white-hat security researchers, including StakeWise and Certora, under the DAO’s Safe Harbor framework. This structure caps white-hat bounties at $1 million per incident and mandates KYC and sanctions screening for all participants.
Per Balancer contributor Xeonus’s request for comment, the proposed plan outlines a structured payout for white hats based on contribution, alongside a pro-rata reimbursement mechanism for LPs. Compensation will mirror original pool tokens—WETH, rETH, WPOL, MaticX and others—calculated on snapshot data of user holdings at the time of the exploit. A claims portal and updated terms of use are under development to facilitate the distribution process.
While $8 million is slated for DAO-governed recovery, an additional $19.7 million recovered by white-hats will be handled separately, and $4.1 million retrieved internally remains outside the bounty program due to preexisting service agreements. The exploit, the third major security incident in Balancer’s history, caused total value locked (TVL) to plunge from $775 million to $258 million and drove BAL token down 30%.
Balancer DAO aims to finalize the recovery plan and execute on-chain distributions by early December. The incident and recovery proposal highlight the evolving tensions between protocol innovation, security incentives, and the responsibilities of DAOs in crisis response.
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