Balancer DAO Cuts Recovery Bounty to 10 % After $128 M Exploit
The community‑governed protocol approved a new bounty proposal (BIP‑908) that caps rewards for information or returned assets at a maximum of ten percent of any recovered value, down from an earlier 20 % white‑hat offer.
Governance vote
On February 10, Balancer’s on‑chain governance powered by Snapshot recorded a unanimous vote in favor of the bounty reduction. All nine participants who cast ballots supported the proposal, and the vote reached a quorum of 158 % – a figure bolstered by a single voter who controlled roughly 76 % of the total voting power. The motion, submitted by DAO executor Maxyz, sets the maximum payout at 10 % of the amount that can be reclaimed from the attacker’s wallets.
The decision follows an initial post‑exploit announcement that offered a one‑time 20 % bounty for anyone who could assist in recovering the stolen funds. By halving that incentive, the DAO signals a more cautious approach to rewarding post‑mortem assistance while still leaving a financial lure for potential cooperation.
The November 2025 exploit
In late November 2025, a sophisticated attack drained approximately $128 million from Balancer V2 pools. The attacker exploited a rounding and precision flaw in the composable stable‑pool mathematics, combined with batch‑swap mechanics, to swiftly siphon assets across several Layer‑1 and Layer‑2 networks, including Ethereum, Polygon, Base, Arbitrum, Optimism, Sonic and Berachain.
The breach highlighted a structural vulnerability in the way Balancer’s stable‑pool contracts compute share allocations, an issue that has since been patched. Recovery efforts have already returned a portion of the lost capital, but a sizable share of the funds remains locked in the perpetrator’s addresses.
Chain‑specific response
One of the affected ecosystems, Gnosis Chain, opted to execute a hard fork to unfreeze and return the frozen balances, a move that underscored the broader DeFi community’s willingness to intervene when large‑scale losses occur. Other networks are still pursuing on‑chain recovery methods, and the DAO’s bounty proposal aims to incentivize any additional information that might lead to further restitution.
Market context
Balancer continues to be a significant player in the decentralized exchange (DEX) landscape, ranking 11th by daily volume according to DeFi Llama, with more than $203 million traded in the most recent 24‑hour window. The recent exploit and the ensuing governance actions are likely to influence both user confidence and the protocol’s future risk‑management strategies.
Analysis
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Incentive calibration: Reducing the bounty from 20 % to 10 % suggests the DAO believes enough of the capital has already been reclaimed, or that the marginal benefit of a higher payout does not justify the additional cost. The change may also reflect a desire to preserve DAO treasury resources for future security upgrades.
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Governance dynamics: The vote’s overwhelming approval, despite only nine participants, illustrates the concentration of voting power typical in DAO settings. A single large stakeholder can sway outcomes, raising questions about decentralization of decision‑making in high‑stakes scenarios.
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Security posture: The exploit exposed an edge case in stable‑pool calculations that was previously untested. Balancer’s swift patch and the community’s coordinated recovery efforts demonstrate a growing maturity in DeFi risk management, yet the incident serves as a reminder of the importance of rigorous formal verification.
- Cross‑chain exposure: The multi‑network nature of the attack underscores the interconnected risk profile of modern DeFi protocols. Recovery mechanisms must be adaptable across diverse chain environments, a challenge exemplified by Gnosis Chain’s hard‑fork response.
Key Takeaways
- Bounty adjustment: Balancer DAO now caps any recovery bounty at 10 % of the reclaimed amount, a reduction from the earlier 20 % offer.
- Unanimous governance approval: The proposal passed with 100 % support in a Snapshot vote that met quorum despite a small number of voters.
- Exploit recap: Approximately $128 million was stolen in November 2025 due to a precision bug in stable‑pool math and batch‑swap operations.
- Partial fund recovery: Some of the lost assets have already been returned, but a substantial amount remains in attacker‑controlled wallets.
- Chain response: Gnosis Chain employed a hard fork to restore frozen funds, highlighting proactive measures among affected ecosystems.
- Continued relevance: Balancer remains a top‑tier DEX, trading over $200 million daily, and the incident will likely shape its future security roadmap.
The DAO’s decision reflects a calibrated balance between rewarding helpful actors and safeguarding treasury resources, a pattern that may become a benchmark for other DeFi projects navigating post‑exploit recoveries.
Source: https://thedefiant.io/news/hacks/balancer-dao-caps-recovery-bounty-at-10-percent-after-november-exploit
