Balancer DAO Moves to Reimburse LPs After $110M Exploit, Plans $8M Token Distribution

Balancer DAO is moving forward with a compensation plan weeks after its Balancer v2 vaults were hit by a major exploit that drained more than $110 million. The decentralized autonomous organization is now discussing a proposal to redistribute roughly $8 million in recovered assets to affected liquidity providers (LPs), offering a partial but meaningful recovery following one of the protocol’s biggest security incidents to date.

According to an RFC posted by contributor Xeonus, the recovered funds were secured shortly after the November 3 attack by whitehat hackers and internal teams. The proposal outlines a structured payout for whitehat participants and a reimbursement process for users based on a snapshot of their pool positions at the moment the exploit occurred. These efforts follow Balancer’s Safe Harbor Agreement, a framework designed to guide ethical fund recovery while capping bounties at $1 million and requiring full KYC and sanctions screening for participating whitehats. Some rescuers on Arbitrum chose to remain anonymous, opting out of any bounty.

The $8 million in tokens spans multiple networks—including Ethereum, Polygon, Base and Arbitrum—and includes assets such as WETH, rETH, WPOL and MaticX. Affected LPs will be reimbursed in the same assets they originally supplied, distributed on a pro-rata, per-pool basis. A new claims portal is under development and will require users to accept updated terms of use if the DAO formally approves the plan.

Beyond the DAO-managed pool, another $19.7 million in osETH and osGNO recovered by StakeWise will be processed separately. An additional $4.1 million rescued internally with support from Certora will not qualify for bounty rewards due to prior agreements.

The exploit, triggered by a vulnerability in Balancer’s smart contract access controls, marks the protocol’s third major security lapse. Since the attack, Balancer’s total value locked has plunged from about $775 million to $258 million, while its BAL token has dropped roughly 30%, highlighting the significant impact on community confidence and the broader DeFi ecosystem.