Balancer Pools Faces Critical Vulnerability: What's Next?

Emergency Response to Mitigate Vulnerabilities

An alert from the Decentralized Finance (DeFi) platform, Balancer, recently highlighted a critical vulnerability that affects its multiple V2 Pools. 

According to the protocol, immediate emergency measures were initiated to safeguard a significant portion of Total Value Locked (TVL), but a certain amount of funds are still exposed to risk. As a precaution, Balancer urged users with affected Liquidity Pools (LPs) to withdraw their assets swiftly.

The Balancer team successfully mitigated approximately 97% of the impacted pools, ensuring that the funds within them are safe. The remaining 3% of affected pools constitute roughly 0.89% of Balancer's total value locked and faces potential risk. 

Importantly, this impact is limited to boosted pools. To manage the situation, specific pools were temporarily paused to mitigate risks. Balancer has provided clear guidance for users to withdraw their liquidity from these paused pools as a precautionary measure.

In response to the situation, Balancer has made pertinent information available on its GitHub page. Moreover, the platform's emergency subDAO has been activated, allowing users to exit from affected pools. 

Pools that couldn't be mitigated have been labeled as 'at risk,' prompting Balancer to recommend immediate withdrawal for users involved in these pools.

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Effect on Pendle

Despite the vulnerabilities, Balancer emphasized that no exploit has occurred, and no funds have been lost at the time of writing. 

Meanwhile, DeFi yield protocol, Pendle tweeted that the Balancer emergency measures are affecting its ETHx-bbaWETH, swETH-bbaWETH, and swETH-bbaWETH [Old] pools.

Funds in the impacted pools are safe, but swaps in the underlying Balancer pools have been disabled, which means no further fees or yield will accrue.

There was an immediate impact on the market when vulnerabilities were revealed. In response to the news, Balancer's native token BAL dropped by over 4% but has since recovered. The token is trading at $3.55, down 1.53% in 24 hours. 

There was an immediate impact on the market when vulnerabilities were revealed. In response to the news, Balancer's native token BAL dropped by over 4% but has since recovered. The token is trading at $3.55, down 1.53% in 24 hours.