Balancer Hack: Over $110M Stolen in 2025 Exploit

Key Takeaways

• A significant exploit targeted Balancer V2, resulting in the siphoning of an estimated $110M to $128M in various digital assets.

• The attack focused on a vulnerability within Balancer’s V2 Vault, specifically related to its `manageUserBalance` function, allowing unauthorized withdrawals.

• Ethereum mainnet was the most affected chain, with notable losses of WETH, wstETH, osETH, and other liquid-staking ETH variants.

• The incident prompted immediate reactions, including price drops for Balancer’s BAL token and precautionary measures from connected DeFi protocols.

• Security researchers are investigating the exploit, with early discussions suggesting a smart contract authorization flaw rather than a key compromise.

Balancer V2 Suffers Major Exploit, Over $100M Drained

On Monday, November 3, 2025, a significant exploit struck the decentralized finance (DeFi) space, targeting Balancer V2. On-chain analytics indicated that over $100 million worth of assets were drained from Balancer’s V2 vaults across multiple blockchain networks. Initial estimates of the total loss ranged from approximately $110 million to $128 million as security analysts worked to reconcile addresses and identify mirrored pools. Prominent among the stolen assets were substantial amounts of WETH, wstETH, osETH, and other liquid-staking ETH derivatives.

The Exploit Unpacked

The core of this exploit revolved around a vulnerability in Balancer’s V2 Vault, which acts as a centralized hub for managing token balances for numerous pools. A specific public function, `manageUserBalance`, which is intended for approved callers to manage internal balances (deposits, withdrawals, transfers), was found to have a permission or validation gap. This gap allowed an attacker to craft malicious operations that effectively withdrew balances they did not own or tricked the Vault into authorizing actions retroactively. The impact was swift and widespread, draining multiple pools across different chains within minutes, highlighting the extensive blast radius when a central hub’s validation mechanisms fail.

💡 Key indicators reported by security researchers pinpointed the `manageUserBalance` function on the V2 Vault as the primary trigger surface for the exploit.

📍 The initial wave of stolen assets included WETH, wstETH, and osETH, with other liquid staking tokens also featuring prominently.

✅ The exploit affected multiple chains, with Ethereum mainnet experiencing the largest drain. Other networks like Base, Polygon, and Sonic also showed related outflows, primarily through integrations and forks.

The fundamental issue was a smart-contract authorization bug at the vault layer, not a breach of private keys. While such breaches still occur, this incident was a clear case of intricate code being the cause.

Assessing the Total Losses

The reported figures for the stolen assets evolved rapidly throughout the day. Initial reports from outlets like CoinDesk suggested around $110 million had been moved to a newly controlled wallet. However, subsequent analysis by security dashboards and cross-chain trackers increased the total to the $116 million to $128 million range as more affected addresses and pools were identified. It is expected that the final figure will settle as overlapping or duplicate addresses are consolidated.

📊 The initial breakdown circulated among trackers indicated the following approximate distribution:

• Ethereum mainnet bore the brunt of the losses.
• Base and Sonic witnessed combined losses in the single-digit millions.
• Other chains and integrations accounted for total losses in the low seven figures.
• WETH, wstETH, osETH, frxETH, and rETH were identified as the top stolen assets.

(Note: Exact figures varied across different reporting sources, and reconciliation efforts were ongoing.)

Market and Protocol Reactions

The Balancer hack triggered immediate responses across the DeFi ecosystem.

⚡ The price of Balancer’s native token, BAL, experienced a decline of approximately 4–5% following the news. The broader cryptocurrency market also saw some wobbling, with some reports noting a intraday dip in ETH prices during the sell-off.

📍 Several protocols that had integrated with or utilized Balancer V2 temporarily paused operations, withdrew funds, or initiated risk assessments of their positions. For instance, Berachain announced emergency measures to mitigate potential related risks on its network.

📊 Some market commentary linked the negative news flow to broader weakness in ETH during the trading day, although broader macroeconomic uncertainties also likely contributed to market volatility.

Code Vulnerability: Vibe Coded or AI-Assisted?

Community discussions on social media platforms, particularly X, highlighted the presence of debug-style logs within the attacker’s contract on-chain. This is considered unusual for sophisticated exploits and has led to speculation that the code might have been hastily written, possibly with AI assistance (as Large Language Models often include `console.log`-style traces). However, these are currently based on community chatter, and a formal post-mortem report is needed for official confirmation.

The Danger of Vault-Level Exploits

Balancer’s design, featuring a single V2 Vault to manage assets across multiple pools, offers significant user experience and gas efficiency benefits. However, this architecture also centralizes the invariant management. If the vault’s security checks fail, access to numerous pools becomes compromised simultaneously. This design choice, while well-understood and subject to numerous audits, demonstrates that even mature smart contracts can contain subtle validation gaps that only become apparent after an exploit occurs.

Immediate Actions for Balancer V2 Users

For users who had funds or exposure in Balancer V2 and its associated forks or integrations, immediate action is advised:

1. Withdraw or Unwind Exposure: It is recommended to pull funds from Balancer V2 pools and any integrated or forked platforms until the Balancer team provides a verified list of safe pools or transactions.
2. Revoke Unnecessary Approvals: Users should review and revoke smart contract approvals for Balancer contracts that are no longer needed. Tools like Etherscan Token Approvals, Revoke.cash, or DeBank can facilitate this process.
3. Monitor Wallets: Keep a close watch on personal wallets for any unexpected token transfers by monitoring transaction histories on block explorers and reputable dashboards.
4. Follow Official Updates: Stay informed by following real-time updates from Balancer, PeckShield, Lookonchain, and other recognized incident response teams.

Lessons for DeFi Protocols and Users

This incident offers critical lessons for both developers and active participants in the DeFi space:

• Audits are Not a Panacea: While security audits significantly reduce risk, they do not eliminate it entirely. Critical vulnerabilities, especially at the authorization layer, can still be missed even in well-audited, battle-tested code. Implementing robust formal verification and simulation at the accounting hub level is crucial, not just at the pool wrapper level.
• Redundancy in Safety Measures: Relying on a single security mechanism is risky. Employing multiple layers of defense, such as wallet-level transaction guards, strengthened front-end integrity checks, and immutable CI/CD pipelines for web assets, can help limit the potential damage when an exploit occurs.
• Anticipate Cross-Protocol Contagion: When a DeFi protocol’s vault serves as a central hub for many individual pools or integrated applications, issues can quickly cascade. Protocols should proactively plan communication strategies and implement circuit breakers to manage widespread impact on dependent applications and forks.

Concluding Thoughts on the Balancer Exploit

The Balancer hack serves as a stark reminder that the convenience and efficiency of DeFi are powered by sophisticated shared components, which inevitably become high-value targets for attackers. For individuals with funds in Balancer V2 or related projects, the immediate priority should be to mitigate risk by withdrawing exposure, revoking approvals, and awaiting official confirmation of security status. Further updates will be provided as post-mortem analyses are published and the full scope of the incident is clarified.