Balancer, a prominent decentralized finance (DeFi) platform, has confirmed a significant hack resulting in the theft of over $129 million in cryptocurrency assets. The attack impacted multiple blockchain networks, including Ethereum, Base, Optimism, Polygon, Sonic, and Berachain. The rapid response from Berachain has garnered particular attention within the crypto community. This incident is indicative of an escalating trend of smart contract vulnerabilities being exploited in DeFi projects.
Berachain Takes Swift Action to Mitigate Damage After Major Exploit
Following the exploit, the Bera Foundation announced that validators had initiated a deliberate halt of the Berachain network. This measure was deemed necessary to prevent further losses and to allow developers to implement an emergency hard fork. The hard fork is intended to address the vulnerabilities that affected Balancer vaults and liquidity pools. The foundation has assured users that network operations will only resume once affected funds have been recovered. This action represents one of the first instances of Berachain pausing block production since its mainnet activity increased earlier this year.
A core community figure confirmed in a recent X post that key partners, including the Ethena team, were contacted to identify and lock down risk vectors. These actions included disabling bridging out of Berachain, freezing lending markets and USDe deposits, and pausing HONEY minting and redemptions. The team also alerted centralized exchanges to block the hacker’s wallet addresses. The Bera Foundation has committed to full transparency throughout the recovery process and stated that insights gained from this incident will contribute to the development of more robust DeFi security standards on the network.
Balancer Hack Exploits Smart Contract Flaws, Draining Millions
On-chain data indicated that the attack originated from a malicious contract designed to manipulate Balancer’s Vault calls during the initialization of pools. Investigators found that deficiencies in authorization and callback handling allowed the hacker to execute unauthorized swaps. Similar attacks have been observed on other platforms, including 1inch, Curve Finance, and Euler Finance, among others. These vulnerabilities enabled malicious actors to alter balance changes across the affected pools.
Consequently, assets were drained from various networks, with Ethereum being the primary target, though Berachain and several other networks were also affected. Stolen tokens included WETH, osETH, wstETH, sfrxETH, and rsETH. The activity of a previously dormant whale wallet, which withdrew over $7.38 million from Balancer shortly after the hack, further fueled suspicion among analysts.
Balancer Hack Triggers Crypto Market Sell-Off
The Balancer hack had a significant impact on the cryptocurrency market, leading to considerable price drops. BAL, Balancer’s native token, experienced a decline of over 10%, trading around $0.897 at the time of reporting. BERA, Berachain’s token, also saw a 7% decrease, falling to $1.69. Trading volumes for BERA surged by over 90% as investors reacted to the news.
The broader market was also affected, with liquid staking tokens such as LDO, JTO, and RPL experiencing sharp declines. Even Ethereum (ETH) fell by over 4% in a 24-hour period, trading at approximately $3,686, according to CoinMarketCap data.