Six ethical hackers will be rewarded up to $1 million each for their fund recovery efforts.
The decentralized finance (DeFi) protocol Balancer officially presented its Balancer Hack Compensation Plan this Thursday to mitigate losses from a massive exploit that occurred in early November. The attack drained over $128 million from its vaults, exploiting a vulnerability in Balancer V2’s Composable Stable Pools.
The proposal focuses on distributing approximately $8 million in rescued assets that were secured through a combination of external “white hat” interventions and internal rescue operations. The total salvaged funds amount to about $28 million; of which, $19.7 million in osETH and osGNO are being managed by the liquid staking protocol StakeWise.
The Balancer Hack Compensation Plan adopts a “non-socialized” model. This means that rescued funds will be returned only to Liquidity Providers (LPs) in the specific pools that were compromised. The distribution will be carried out pro-rata, based on the Balancer Pool Token (BPT) holdings that users had at the exact time of the attack.
Compensation will be made “in-kind” (payment-in-kind), ensuring that LPs receive the same tokens that were recovered.
It is worth noting that Balancer included in its proposal the awarding of bounties to six ethical hackers who intervened to recover nearly $3.86 million during the attack. These actors will receive a 10% reward, capped at $1 million per operation.
The largest individual rescue was carried out by a white hat labeled “Anon #1,” who recovered $2.68 million on the Polygon network. Security researcher Bitfinding rescued another $963,832 on the Ethereum mainnet.
To claim their rewards, white hats must undergo strict identity verification processes, KYC, and sanctions screening under Balancer’s Safe Harbor Agreement (SEAL). Rescuers based in Arbitrum have waived their rewards by declining to identify themselves.
