Balancer's $1.4M hack recovery proposal leaves liquidity providers waiting
Balancer proposes distributing recovered ETH to affected pools
Balancer has put forward a proposal to divide 296.401711 ETH recovered after an Aug. 31 exploit among liquidity providers in 120 legacy V1 pools. The plan, posted on the Balancer forum on Sept. 18, records tokens worth about $1.39 million at attack-time prices as having been drained from those pools. Five ETH returns to the Balancer DAO Multisig between Sept. 8 and Sept. 16 came from the main greyhat, three anonymous whitehats, and block builder Ultrasound.money.
Key numbers
- 296.401711 ETH recorded as returned to the DAO multisig
- 120 V1 pools affected by the exploit
- $1.39 million in losses at attack-time prices
- Block 25,872,248 used as the pre-attack snapshot for LP claims
How Balancer would allocate the recovered ETH
Under the proposal, recovered ETH would first be allocated to each pool based on that pool's share of the total dollar loss at the time of the attack. Each pool's allocation would then be divided among its liquidity providers according to their pool-token holdings at Ethereum block 25,872,248, which immediately preceded the first exploit transaction at block 25,872,249. Using a single pre-attack snapshot would cover all 120 pools, including those later targeted by copycat activity.
The formula determines the relative weighting of claims, but the Sept. 18 post does not include the per-pool allocation table, holder lists, or per-address amounts. Until those files are published, an individual liquidity provider cannot calculate an exact ETH payout.
Claims await a vote and address-level data
As of Sept. 20, the forum post remained labeled BIP-XXX and contained no Snapshot vote link. The proposal states that claim data would be published and a claim mechanism deployed only if the proposal passes, leaving the V1 claim window unopened with no announced start or end dates.
Receiving the proposed payment would also carry a legal condition. Claimants would need to provide digital consent releasing Balancer Labs, Balancer DAO, Balancer Foundation, affiliated parties, and service providers from liabilities related to the incident. Payments would be made in ETH, while contract and multisig claims would be handled case by case.
The recovery pool is separate from assets covered by Balancer's proposed shutdown. A separate wind-down proposal states that funds recovered from protocol attacks belong to affected liquidity providers and sit outside the treasury distribution intended for BAL token holders.
Why this matters
The recovery proposal defines a route for returning funds to affected liquidity providers, but it does not yet represent a confirmed payout. Without published allocation data and a passed vote, LPs have no way to know what they would receive or when.
What is still unclear
Important details remain unpublished: the per-pool allocation amounts, individual holder lists, per-address claim figures, the timing of any community vote, and the start and end dates of a potential claim window. The proposal also does not state a recovery percentage, since the attack loss is expressed in dollars at historical prices while the recovery pool is denominated in ETH.
Sources
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.