Balancer community proposes plan to distribute funds recovered from hack

In a recent development, the Balancer community has put forth a detailed proposal for distributing approximately $8 million recovered from a significant hack that occurred in November 2025. This incident, which resulted in a total loss of $116 million, has raised concerns about security in the cryptocurrency space.

Distribution plan for the $8 million recovered from the hack

On Thursday, two members of the Balancer protocol community submitted a plan that specifies how the recovered funds will be allocated among the victims. Out of the total funds lost during the hack, around $28 million was retrieved by a combination of white hat hackers, internal rescue teams, and StakeWise, an Ether liquid staking platform. However, the proposal focuses solely on the $8 million recovered by white hat hackers and internal teams, while StakeWise will handle the distribution of the nearly $20 million it recovered separately.

Non-socialized reimbursements aim to support specific liquidity pools

The authors of the proposal suggest that all reimbursements should be non-socialized. This means that the funds will only be distributed to the specific liquidity pools that experienced losses during the hack. The distribution will be conducted on a pro-rata basis, reflecting each holder's share in the liquidity pool, represented by Balancer Pool Tokens (BPT). Additionally, the proposal emphasizes that reimbursements should be made in-kind, ensuring that victims receive payment in the same tokens they lost. This approach aims to avoid price mismatches between different digital assets, providing a fairer compensation process.

Details of the hack reveal vulnerabilities despite multiple audits

The Balancer hack has been described as one of the most sophisticated attacks of 2025. Deddy Lavid, the CEO of a blockchain cybersecurity firm, highlighted the need for heightened security measures in the crypto space as threats continue to evolve. Despite Balancer’s code being audited 11 times by four different security firms, the platform was still exploited. The post-mortem report released by Balancer on November 5 outlined that the attack targeted a rounding function used in swaps within its Stable Pools. The attacker exploited a flaw that allowed values to be rounded up instead of down, facilitating the drain of funds from Balancer’s pools.

Importance of user safety in the evolving crypto security landscape

This incident underscores the ongoing challenges in ensuring user safety within the cryptocurrency ecosystem. As security threats become more sophisticated, the need for robust protective measures is more critical than ever. The proposed plan to reimburse victims is a step towards regaining trust and demonstrating a commitment to the safety of users in the crypto space.