Balancer DeFi Protocol Loses Nearly $1 Million in Hacker Attack
In a disheartening turn of events, decentralized finance protocol Balancer (BAL) confirmed a hacker attack just days after warning of a critical security vulnerability affecting multiple pools. The attack, which took place on August 27, resulted in a loss of nearly $1 million for Balancer.
On August 22, NewsBTC reported that Balancer had discovered a critical vulnerability in its protocol. Despite efforts to mitigate the risks and warn users, Balancer was unable to pause the affected pools. In response, the protocol advised users to withdraw their funds from the vulnerable liquidity pools to prevent further exploits.
Balancer Exploit Unveiled
On Sunday, Balancer turned to X (formerly known as Twitter) to confirm the existence of an exploit related to the previously disclosed security vulnerability. While remedial actions were taken to reduce the risks, they were insufficient to halt the affected pools.
Therefore, users were advised to withdraw their funds from the vulnerable liquidity pools to protect their investments.
Meir Dolev, a Web3 security expert, shed light on the situation, revealing that the attacker persistently carried out their operation. Approximately $900,000 was affected, with over $600,000 already transferred to the address 0xB23711b9D92C0f1c7b211c4E2DC69791c2df38c1.
The same direction was taken by blockchain security company Beosin, which revealed that the hack was executed through multiple flash loan attacks. Flash loans, a feature that allows users to borrow funds without collateral, are increasingly being used as tools for exploitation in the DeFi space.
The Balancer exploit underscores the ongoing challenges DeFi platforms face in ensuring the security of user funds. As the industry continues to innovate and attract significant capital, securing protocols and addressing vulnerabilities must remain a top priority.
BAL Price Plummets as Exploit Triggers a 20.81% Drop
Following the recent exploit targeting Balancer, the project’s native token BAL had significant implications on the market.
The exploit, resulting in a loss of approximately $1 million, had notable effects on the price of BAL and various key metrics, reflecting the challenges the platform faced according to data from Token Terminal.
As a result, the price of BAL experienced significant volatility. In the past 30 days, the token recorded a sharp decline of 20.81%, as shown in the following chart.
This downtrend is even more apparent when considering the token’s performance over a longer period of 180 days, during which it dropped by 51.69%, highlighting the impact of the exploit on investor sentiment and market confidence in BAL.
Furthermore, BAL’s all-time high (ATH) stands at $74.45, serving as a reminder of the token’s previous price peak. However, the all-time low (ATL) of $3.36 showcases the extent of the token’s decline following the exploit.
The consequences of the exploit also affected Balancer’s market capitalization metrics. The circulating market capitalization, representing the value of BAL tokens in circulation, currently stands at $150.06 million. However, this metric has suffered a significant decline of 22.60%, indicating a decrease in token valuation and investor trust.
Another important metric impacted by the exploit is Balancer’s Total Value Locked (TVL). TVL represents the amount of capital locked in the protocol.
Following the exploit, Balancer’s TVL has decreased by 33.86%, suggesting a shift in sentiment among investors and a potential reallocation of funds to safer platforms.
Selected image from iStock, chart from TradingView.com.
