Balancer has released its first detailed proposal outlining how it plans to return $8 million in recovered assets to liquidity providers (LPs) affected by the protocol’s massive V2 exploit earlier this month. The plan, posted on Nov. 27, marks a major step toward compensating users after one of DeFi’s most disruptive hacks of 2025.
How the Repayment Plan Works
According to the proposal, the $8 million was secured through a combination of whitehat rescues and Balancer’s internal recovery efforts across multiple networks. Another $19.7 million in assets linked to osETH and osGNO is being handled separately by StakeWise.
Whitehat Bounties
Whitehat hackers who helped recover funds during the attack will receive:
- 10% bounty of the assets they recovered
- Payouts made in the same tokens they returned
All participants must complete identity verification, KYC checks, and sanctions screening under Balancer’s Safe Harbor Agreement. The foundation says all whitehats involved have already passed compliance, though their identities will remain private.
LP Repayments
For affected liquidity providers:
- Repayments will be pro-rata, based on BPT balances at snapshot blocks taken right before the exploit began.
- Distributions will be non-socialized, meaning each pool’s recovered assets stay within that same pool.
- Payments will be made in-kind, returning the same tokens that were rescued.
A claim interface will allow LPs to withdraw their compensation after agreeing to Balancer’s updated terms. Any funds left unclaimed after the claim period will be handled through a future governance vote.
Background: The $128M Balancer V2 Exploit
On November 3, Balancer suffered a major exploit that drained more than $128 million across Ethereum and several Layer-2 networks. Attackers took advantage of a precision-loss bug in Balancer’s v2 pool invariant, manipulating token balances to repeatedly extract profits in minutes.
While much of the stolen crypto was quickly routed through privacy tools, rapid action by whitehats, StakeWise, Certora, and Balancer’s internal teams helped secure significant portions of the affected assets. StakeWise recovered around $19 million in osETH, and Balancer immediately paused compromised pools to prevent further losses.
What Comes Next
The new reimbursement framework is now open for community review and will proceed to a governance vote once finalized. If approved, it will mark a major milestone in Balancer’s effort to restore user confidence and close the chapter on one of the largest DeFi exploits of the year.
