Which DeFi exploit drained liquidity?

TLDR

The major DeFi exploit that drained liquidity last week was Balancer (BAL): over $128 million was siphoned from its V2 pools across multiple chains, and the team has proposed reimbursements to affected LPs per a reimbursement plan.

1. Attack exploited a rounding flaw in Composable Stable Pools, enabling batched swaps to drain pools across Ethereum, Polygon, Base, and Arbitrum per a technical summary.
2. Roughly $28 million was recovered, with about $8 million proposed for LPs and $19.7 million handled by StakeWise per an $8M reimbursement plan.
3. Balancer outlined pro rata repayment by pool and 10 percent whitehat bounties, described in the proposal summary.

Deep Dive

1. Scope Of The Exploit

Balancers V2 liquidity pools were hit by a large exploit, draining more than $128 million across five networks. The team published a framework to return recovered funds to liquidity providers, confirming the scope and approach in a reimbursement plan.

• Media reports detail the incidents size and cross chain impact and the plan to distribute recovered assets to LPs via snapshots and pool specific payouts, with governance review ongoing in the proposal summary.

2. How Liquidity Was Drained

Analyses point to a rounding precision flaw in Balancers Composable Stable Pools. Attackers combined the bug with batched swaps to manipulate price calculations and empty multiple pools on Ethereum, Polygon, Base, and Arbitrum, per a technical summary.

• The reports note the vulnerability was not caught in prior audits and that pausing affected components limited further losses while responders worked to salvage assets, documented in the technical summary.

3. Recovery And Repayment

About $28 million was recovered through whitehat and internal rescue efforts. The current proposal would return roughly $8 million directly recovered by whitehats and internal teams to LPs, with $19.7 million tied to StakeWise assets processed separately via StakeWise governance per the $8M reimbursement plan.

• The framework includes pool level pro rata distributions based on pre exploit snapshots and 10 percent whitehat bounties, capped per operation, described in the proposal summary.

Conclusion

Balancers exploit was the weeks standout event for drained liquidity, with a clear technical root and a defined recovery path. The proposed repayments and whitehat bounties aim to repair damage while reinforcing governance and incident response. For LPs, the key is pool level visibility and following the claim process once approved.