Gnosis Chain operators executed a network hard fork on Monday to recover digital assets displaced by a $116 million exploit of Balancer-managed contracts in November. The action follows an earlier community vote to adopt a soft fork, reflecting consensus among node operators to pursue recovery measures.
The hard fork isolates affected liquidity pools on the Gnosis Chain, restoring control of stolen funds to a DAO-controlled wallet. The protocol developers indicated that recovered assets will be held securely until claims processes are finalized, with contributors to the rescue effort potentially receiving compensation for their roles.
Discussion among validators continues around the mechanism and timeline for fund distribution, as well as recognition of white-hat contributors. Protocol lead Philippe Schommers stated that enablement of claims is targeted before the Christmas holiday, after which further governance decisions will determine compensation and long-term safeguards.
The Balancer exploit on Nov 3 exploited vulnerabilities in the V2 Composable Stable Pools, leading to unauthorized transfers of Ethereum and ERC-20 tokens. Despite multiple audits prior to deployment, the incident highlights persistent risks in complex automated market maker designs. During recovery, white-hat actors returned an estimated $28 million, with the remainder restored via the hard fork.
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