128M gone overnight.
@Balancer, one of DeFi’s most trusted OGs got hit at the core.
A single line of code inside its shared vault turned efficiency into disaster.
Let's do a post-mortem. 🧵
------------------------------
The Early Whispers
On-chain sleuths caught the scent fast, funds were leaking from Balancer’s main Vault contract.
Within hours, the losses crossed nine figures, spreading across Ethereum, Base, Sonic, and Polygon.
tl;dr:
→ Core issue: Balancer’s V2 Vault, the contract holding all pool assets.
→ Attack vector: manageUserBalance() function exploit.
→ Hacker used fake sender identities to drain assets.
------------------------------
The Bug That Broke the Vault
The function manageUserBalance() was supposed to safely handle internal balances.
But inside it, a small logic flaw hid for years:
if (msg.sender == op.sender)
The catch? op.sender was user-supplied.
That meant an attacker could impersonate anyone and call withdrawals directly.
The fatal line let hackers drain tokens through UserBalanceOpKind.WITHDRAW_INTERNAL.
A single bug and the shared vault design turned it into a chain-wide contagion.
------------------------------
Why the Architecture Amplified It
Balancer V2’s shared vault was built for efficiency:
one pool, one vault, cheaper swaps, easier flash loans.
But efficiency came with risk.
When one vault holds everything, one exploit touches it all.
The system was audited by OpenZeppelin, Trail of Bits, Certora, and ABDK back in 2021–22, yet the logic slip survived every audit.
Even seasoned forks like
@beets_fi on Sonic lost $3 million +, and Berachain temporarily halted its chain.
------------------------------
The Damage Report
Total loss: ~$128 million
Assets drained:
> osETH ≈ 6,850 ($26.9 M)
> WETH ≈ 6,590 ($24.5 M)
> wstETH ≈ 4,260 ($19.3 M)
Chains hit: Ethereum, Base, Sonic, Polygon
Forks impacted: Beets Finance, Berachain pools, and others.
Panic spread fast, a dormant whale withdrew $6.5 M from Balancer after three years of inactivity.
------------------------------
Partial Recoveries
Some good news:
➢
@stakewise_io : ~$20.7 M in osETH + osGNO → fully recovered
➢
@berachain : ~$12 M in Ethena/Honey tripool → recovery ongoing
------------------------------
What It Means for DeFi
This wasn’t just a Balancer bug ,it was a wake-up call.
DeFi thrives on composability, but shared vaults and reused code multiply systemic risk.
Audits can’t always catch logic flaws that surface years later.
The more composable DeFi becomes, the more interconnected its failure points get.
------------------------------
How to Stay Safe
➢ Recheck your Balancer or fork positions.
➢ Revoke approvals via
@RevokeCash or
@DeBankDeFi.
➢ Diversify liquidity; avoid all-in exposure to shared vault systems.
➢ Question every “audited” protocol:
audits ≠ immunity.
------------------------------
Final Thoughts
The Balancer hack wasn’t just a security lapse, it was a DeFi design warning.
Shared efficiency turned into shared vulnerability.
It’s a reminder that trust in DeFi isn’t just code-based; it’s architecture-based.
Your thoughts on the exploit?