Balancer DeFi is targeted in an attack and loses over US$110 million in assets.

• Flaw in smart contracts drains Balancer's V2 vaults.
• Theft exceeds US$110 million across multiple blockchains.
• Auditors investigate attack that exploited protocol's compostable design.

Balancer suffered another serious attack, with estimated losses between US$110 and US$116 million across various blockchains. The incident primarily affected the protocol's V2 vaults and liquidity pools, exploiting a vulnerability in smart contract interactions.

According to on-chain analysis released by experts, including analyst Adi (@AdiFlips), the attack began with the deployment of a malicious contract that manipulated internal Vault calls during pool initialization. This manipulation allowed the attacker to bypass security mechanisms and execute unauthorized exchanges between interconnected pools, draining funds in a matter of minutes.

Here's everything you need to know about the Balancer Hack:

1. The attack targeted Balancer's V2 vaults and liquidity pools, exploiting a vulnerability in smart contract interactions. Preliminary analysis from on-chain investigators points to a maliciously deployed contract that… pic.twitter.com/udAM4hB0OD

— Adi (@AdiFlips) November 3, 2025

The attack vector involved authorization flaws and incorrect callback handling, opening loopholes for balance manipulation and cascading swaps. A key transaction on the Ethereum network—identified as 0xd155207261712c35fa3d472ed1e51bfcd816e616dd4f517fa5959836f5b48569—directed assets to a new wallet controlled by the attacker. The funds were then consolidated and possibly routed to mixing services or cross-chain bridges, making them difficult to trace.

Balancer's compostable architecture, in which pools interact intensely with each other, ended up amplifying the vulnerability. Similar attacks have already hit other automated market makers (AMMs), especially when they involve deflationary tokens or pool rebalancing mechanisms.

Auditors such as PeckShield and Nansen are conducting detailed forensic investigations and have confirmed that the attack was purely technical, with no evidence of compromise of private keys. The losses include large amounts of WETH, wstETH, osETH, frxETH, rsETH, and rETH — with Ethereum being the most affected, with approximately US$70 million drained.

The impact also extended to the Base, Sonic, and Polygon networks, totaling approximately US$9 million in additional damage. Derived protocols such as Beets.fi and Berachain were compromised due to the use of similar code components.

The BAL token fell between 5% and 8% after the attack was confirmed. To date, Balancer has not released details on mitigation measures or potential compensation for users, while emergency recommendations include immediate withdrawal of funds, revocation of permissions, and active monitoring of affected wallets.