Balancer hack: 0.36% affected liquidity provider to be compensated soon

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Balancer, another DeFi protocol that recently made headlines amid the distribution of its governance token (BAL), will reimburse investors affected in yesterday’s incident soon. The flaw which resulted in the Balancer hack was pre-informed, however, the company’s team took the report lightly, and they have apologized.

Balancer hack could have been handled early

In a Medium post on June 30, the team behind the Ethereum-based market-making protocol apologized to their early adopters affected in the recent Balancer hack. The company took the blame for the incident, given that a bug bounty report was presented to them earlier before the protocol exploitation, most precisely, on May 6.

The bug bounty report, which was tabled to the company by Hex Capital’s Ankur Agrawal, warned about the potential effect of deflationary tokens on the protocol, which was the actual cause of Balancer hack. The team at Balancer was aware of the side effects of deflationary assets; however, they did not think it would be a practical attack.

Balancer will compensate affected investors

The company wrote:

The bug bounty report describes in detail the attack that happened. Our team, however did not think it would be a practical attack because of the enormous amounts of funds and also gas we thought would be required for bringing the balance of the deflationary token to near 0 in a single atomic transaction.

However, the company noted that the affected investors would be compensated for their due fund before the Balancer hack. Per the report, only 0.36 percent of Balancer pools’ liquidity was affected by the incident. While the company failed to state the exact date for reimbursement, it did mention that the investors will be compensated as quickly as possible. 

The compensation of STONK and STA (the deflationary assets responsible for Balancer hack) will be handled by their team, respectively. Balancer said it would only compensate for other tokens. Meanwhile, Hex_Capital will equally be rewarded for the bug bounty report.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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