The Ethereum staking protocol, StakeWise, announced the successful Balancer hack funds recovery from the V2 exploit. They secured $20.7 million in osETH and osGNO tokens stolen on Monday, November 3rd. The news was confirmed by the StakeWise team on their official channels, providing significant relief to the community.
The attack on Balancer V2 was a sophisticated price manipulation. It occurred over several hours on November 3rd. The attackers drained an estimated amount exceeding $120 million. The main target was the ‘stable’ pools of the V2 version of the DeFi protocol. The vulnerability affected instances and forked versions of the V2 contract across all chains. However, StakeWise acted quickly using an emergency multisig transaction. They managed to recover 5,041 osETH, valued at $19 million. They also secured 13,495 osGNO, worth $1.7 million.
This recovery is a significant milestone for the exploit’s victims. It represents 73.5% of all stolen osETH and 100% of the stolen osGNO. StakeWise has confirmed that the recovered funds will be returned to the affected users, mitigating much of the damage. The incident highlights the persistent vulnerabilities in complex bridges and pools. Nonetheless, the swift Balancer hack funds recovery demonstrates the importance of security mechanisms. Incident response, such as emergency multisig wallets, was crucial.
Will this recovery be able to boost the price of Ethereum above $3,700?
The initial hack had an adverse ripple effect on the market. Ethereum’s price fell over 8% on Monday, as most of the stolen tokens were ETH-related. Therefore, the market feared a massive sell-off of the illicit funds to launder the capital. This selling pressure would have negatively impacted ETH. The news of the Balancer hack funds recovery seems to have calmed investors. The risk of tokens being dumped on the open market is significantly reduced. As a result, ETH showed a slight rise of 1.1% on Tuesday, trading near $3,640. Optimistic sentiment has moderately returned.
StakeWise has emphasized that its smart contracts were not compromised. The osETH token and its core operations remain secure. In fact, the osETH–Aave ETH liquidity pool was unaffected, as it uses Balancer V3, a version immune to the specific exploit. Nonetheless, the team warns of a potential temporary decrease in osETH liquidity. Providers are withdrawing funds from the affected V2 pools for security reasons. This could cause temporary deviations in the osETH price, below its internal exchange rate. Users can still safely burn osETH within the protocol and proceed with unstaking ETH.
