Balancer Details $8M Recovery Plan for Users After $128M Exploit

TLDR

• Balancer plans to return $8M in recovered funds to users affected by the $128M exploit.
• Whitehat actors and internal rescues recovered $28M, with $8M allocated for reimbursements.
• Funds will be distributed based on pool shares, using snapshot blocks before the exploit.
• Whitehats involved in the recovery will receive up to $1M in bounties upon verification.
• Liquidity providers must claim assets within 180 days, or unclaimed funds will be reallocated.

Balancer has revealed a reimbursement plan to return $8 million in recovered assets to liquidity providers after a $128 million exploit. The proposal outlines how funds will be distributed to users affected by the exploit. The plan includes whitehat rescues, internal recoveries, and bounty payouts to security experts who helped retrieve stolen assets.

$28 Million Recovered Through Whitehat Interventions and Other Actions

Following the exploit, Balancer and its partners managed to recover about $28 million. The funds were retrieved through a mix of whitehat interventions, internal rescues, and third-party actions. Whitehat actors, including an anonymous individual named “Anon #1,” helped recover around $3.9 million across several networks.

The $8 million identified for reimbursement comes from assets rescued by whitehats and Balancer’s internal efforts. StakeWise, another protocol involved, will handle the return of $19.7 million to its users separately. This move is in line with Balancer’s framework, which seeks to prioritize transparency and fairness in reimbursements.

Pool-Specific Reimbursements and Bounty Details

Balancer’s reimbursement framework ensures that the distribution of funds will be pool-specific. This means that liquidity providers from each affected pool will receive compensation based on their share of the pool. The distribution will be calculated using snapshot blocks taken before the exploit occurred.

The proposal also offers a 10% bounty to whitehat actors who participated in the recovery efforts. However, the bounty is capped at $1 million per actor and is payable once they complete necessary identification and verification steps. The funds for these bounties will be paid in the same tokens as the recovered assets.

Claim Process and Legal Terms for Affected Users

To claim their reimbursement, liquidity providers will need to provide consent to Balancer’s terms and conditions. The process will include a 180-day claim period. If the assets remain unclaimed after this period, they will be treated as dormant and reallocated based on future governance decisions.

Balancer’s Safe Harbor Agreement provides clear terms for whitehat interventions. As per the framework, internal rescue efforts led by Certora will not qualify for bounties. The internal team acted under a pre-existing service relationship, distinct from the whitehat protocol.

Balancer’s reimbursement plan sets clear guidelines on returning funds to the affected community. The steps ensure transparency in distributing the assets and rewarding those who helped recover stolen funds. With this approach, Balancer aims to restore trust among its users and continue its operations securely.

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