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Audited Yet Exposed: Balancer’s $128 Million Breach Ignites DeFi Security Discussion

Audited Yet Exposed: Balancer’s $128 Million Breach Ignites DeFi Security Discussion

Bitget-RWA2025/11/03 21:50
By:Bitget-RWA

- Balancer, a DeFi protocol, lost $128M in a 2025 exploit targeting v2 vaults, reigniting debates on smart contract security. - Attackers manipulated invariant-based swap rules to drain liquidity pools across Ethereum, Arbitrum, and other chains. - Community reactions split between calls for proactive security upgrades and acknowledgment of inherent DeFi risks. - Despite audits by Certora/OpenZeppelin, the breach exposed gaps in current security practices, prompting demands for real-time monitoring. - Bala

The decentralized finance (DeFi) landscape has been shaken by a significant security breach, as

, a leading liquidity protocol, suffered losses exceeding $128 million across several blockchain platforms. This incident, which exploited vulnerabilities in Balancer v2 vaults, stands as one of the most substantial DeFi hacks of 2025 and has reignited concerns over smart contract safety, even after thorough code audits.

Audited Yet Exposed: Balancer’s $128 Million Breach Ignites DeFi Security Discussion image 0

The exploit occurred when attackers manipulated Balancer’s invariant-based token swap mechanisms, distorting exchange rates to drain funds from liquidity pools. Blockchain analysis shows the perpetrator initially extracted 6,587 WETH (about $24.5 million), 6,851 osETH (around $26.9 million), and 4,260 wstETH (approximately $19.3 million), with the total losses eventually reaching $128.64 million across

, , , Base, and other chains, as reported by . The attacker used counterfeit tokens and malicious smart contracts to manipulate invariant calculations, allowing them to execute trades that drained liquidity, according to .

Balancer’s technical team acknowledged the breach via a series of posts on X, emphasizing that their main focus is now on investigating the incident. “We are investigating a possible exploit affecting Balancer v2 pools,” the team stated, advising users to trust only official updates, as highlighted in a

. Following the attack, Balancer’s native token BAL fell by 11.1% to $0.87, and the protocol’s total value locked (TVL) dropped from $776 million to $406 million in just one day, a decline later covered by The Defiant.

The event has divided opinions within the crypto space. Harry Donnelly, CEO of decentralized exchange Circuit, described it as a “serious wake-up call” for DeFi, stressing the importance of building resilience. “The transparency that fostered trust in DeFi also revealed its weaknesses,” he commented, as reported by The Defiant. On the other hand, Vladislav Ginzburg from OneSource maintained that smart contract vulnerabilities are an unavoidable part of DeFi, saying, “Audits matter, but this hack doesn’t signal a new trend,” a viewpoint also shared by The Defiant.

Blockchain researcher Suhail Kakar criticized the sector’s dependence on audits, posting that “‘audited by X’ is almost meaningless,” as documented by The Defiant. Despite Balancer v2 being reviewed by firms such as Certora and OpenZeppelin, the exploit was still successful, prompting doubts about the effectiveness of current security standards.

This breach highlights a troubling pattern: over $2.2 billion in crypto assets have already been stolen in 2025, with DeFi platforms being frequent targets. Security improvements have not eliminated risks. For instance, Berachain temporarily suspended its blockchain and performed an emergency hard fork after discovering the exploit’s effects, as noted by Coinpedia. Polygon validators blocked the hacker’s transactions, while

Chain implemented tools to freeze the attacker’s funds, as detailed by The Defiant.

In response, Balancer has offered a 20% reward for the return of the stolen assets and warned that law enforcement will be involved if the funds are not returned within 48 hours, according to Coinpedia. The protocol also halted affected v2 pools and cautioned users about phishing scams.

This breach underscores the persistent difficulties in safeguarding DeFi systems. While some institutional investors may shift towards safer assets like

, as suggested by Kadan Stadelmann of Komodo Platform, the incident also demonstrates how quickly attackers can adapt. As DeFi continues to develop, experts argue that security must go beyond audits, advocating for real-time monitoring and community-led bug bounty programs.

The Balancer hack is a stark illustration that even thoroughly audited protocols can be compromised, forcing the industry to reconsider the trade-off between innovation and security.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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