Balancer DAO Offers Hacker a Bounty Deal After $128M Exploit
The decentralized autonomous organization (DAO) responsible for managing the Balancer protocol has issued a direct message to the wallet involved in the recent $128 million exploit, extending a proposal for a peaceful resolution. The DAO is offering the attacker a bounty in exchange for the safe return of the stolen funds—an effort to recover the losses without resorting to legal action.
On November 3, Balancer experienced a devastating security breach that compromised its V2 composable stable pools. These pools, which had been operating on-chain for an extended period, were no longer within the pause window—a protective mechanism that could have mitigated the damage. The attacker exploited this vulnerability by deploying a malicious smart contract that manipulated vault calls during the pool initialization process. As a result, approximately $70 million in Ethereum and various other digital assets were siphoned off in the heist.
In response, the Balancer DAO used blockchain messaging to reach out to the hacker’s wallet. In an on-chain communication, the DAO emphasized its preference for a non-confrontational approach, stating its willingness to resolve the issue cooperatively. The message urged the attacker to initiate dialogue by November 8 at 21:00 UTC. Should the deadline pass without a response, the DAO warned of escalated actions using all available legal, technical, and on-chain tools.
The message included an explicit bounty offer: a portion of the stolen funds could be kept by the hacker legally, provided the majority is returned to a specified DAO multisig address. The DAO assured that, upon confirmation of the return, it would refrain from pursuing any investigations or legal steps aimed at identifying the individual—so long as the wallet’s return is the only basis for such action.
Moreover, the DAO noted that if the hacker fails to respond, the bounty would be redirected as a reward to any party that offers verifiable information leading to the identification of the attacker. This effectively opens the door for whistleblowers or blockchain analysts to assist in tracking down the culprit, potentially turning the tables on the hacker.
Currently, Balancer’s native token, BAL, is trading at approximately $0.8547, reflecting a modest daily gain of 4.54%. However, investor confidence remains shaken due to the severe breach and broader bearish trends in the crypto market. Over the past week, BAL has recorded a decline of over 13%, underscoring the damage to the protocol’s reputation and ecosystem stability.
The exploit has once again highlighted the persistent vulnerability of decentralized finance platforms to sophisticated attacks. Despite rigorous smart contract audits and security measures, Balancer’s exploit demonstrates that long-standing systems with outdated safeguards can still be susceptible.
In recent years, DeFi hacks have increasingly involved bounty negotiations, where attackers are offered a share of stolen funds in exchange for cooperation. These arrangements, often referred to as “white hat turnarounds,” aim to incentivize ethical behavior post-incident. While controversial, such strategies are becoming more common as legal recourse in decentralized networks remains challenging.
The Balancer DAO’s offer reflects a growing trend among DeFi protocols to treat hackers as potential collaborators rather than purely adversaries. This approach aims to minimize damage and avoid drawn-out legal or technical battles that could further destabilize the protocol.
Still, there are ethical dilemmas surrounding bounty deals. Critics argue that offering rewards to hackers may encourage further attacks, creating a perverse incentive structure. Others believe that in the absence of centralized enforcement mechanisms, such pragmatic solutions are necessary to protect user funds and restore platform integrity.
The long-term impact of this breach on Balancer’s ecosystem remains uncertain. Liquidity providers may hesitate to reinvest, and new users could be deterred by perceived weaknesses in protocol security. The DAO’s ability to recover funds and demonstrate resilience will be critical in restoring trust.
Furthermore, this incident may prompt broader discussions in the DeFi community about the need for real-time monitoring systems, dynamic pause windows, and more robust governance frameworks. As the space matures, protocols must evolve to address both technical and human vulnerabilities.
With the deadline for the hacker’s response approaching, the crypto world watches closely. Will the attacker choose cooperation and walk away with a legal bounty? Or will the Balancer DAO be forced into a prolonged pursuit, potentially involving law enforcement and blockchain forensic firms?
The outcome of this negotiation could set a precedent for how decentralized protocols handle security breaches in the future. As DeFi continues to grow and attract more capital, the stakes—and consequences—of such incidents will only intensify.