A significant security breach has hit one of Ethereum's prominent decentralized crypto trading platforms, Balancer.
The Rush To Withdraw Funds Due To A Critical Vulnerability
A significant security breach has hit one of Ethereum's prominent decentralized crypto trading platforms, Balancer.
The project has urgently advised a portion of its users to promptly withdraw their tokens in a number of V2 pools, following the identification of a critical vulnerability. This flaw has the potential to expose tens of millions of dollars' worth of users’ LP funds.
The vulnerability was discovered in its high-interest-paying enhanced pools, which is the core of Balancer's user-contributed liquidity pools. On Tuesday, the protocol's governance, which is controlled by owners of BAL tokens, discovered this issue. The crisis response team of Balancer quickly stepped in and stopped a number of pools to stop any possible runoff. However, other pools were unable to be suspended, and as a result, they have been given the high-risk label.
Although the specific details of the bug have not been disclosed publicly, project contributors have reassured the community that a post mortem report will be released after the situation stabilizes.
The consequence of the withdrawals was immediately evident, as the total value locked (TVL) in the protocol plummeted by nearly $100 million within a single day.
Over 80% of the affected assets have already been protected thanks to emergency response operations. According to the Balancer's estimate at this time, roughly $10 million, or 1.4% of the total value locked, is still at risk.
Following the announcement, the Balancer’s native token, BAL, dipped by 2.40% to $3.50. Over the past week, BAL dropped by 14.6%, as part of the wider market sell-off.
