Posted on

Ethereum-Based Balancer Under Attack, Users Receive Warning

Across their social media channels, Ethereum-based decentralized exchange (DEX) Balancer reported an attack against its front end. The platform confirmed that a Domain Name System (DNS) attack targeted the DEX, preventing users from accessing the DEX.

Ethereum DeFi Under Siege

According to an official post, a team is investigating the DNS attack against Balancer. In the meantime, users were asked to avoid interacting with the DEX’s front end to prevent them from falling victim to the bad actors.

In a DNS attack, bad actors can employ different strategies to compromise the security of a website and drain the users’ crypto wallets. Until the investigation is concluded, the team behind Balancer cannot guarantee that the attackers won’t target users.

The team behind the DEX added the following, confirming the protocol’s Decentralized Autonomous Organization (DAO) involvement in resolving the current situation:

The Balancer DAO is actively addressing the current DNS attack and is working with all relevant parties to ensure the full recovery of the Balancer UI. In the meantime, please DO NOT interact with http://balancer.fi or http://app.balancer.fi until further notice.

Independent crypto investigator ZachXBT reported that over $238,000 had been stolen from the DEX. The investigator confirmed that the funds were sent to this Ethereum address: 0x645710Af050E26bB96e295bdfB75B4a878088d7E.

Further data from Etherscan confirms that the bad actors have begun moving the funds. The individuals use Tornado Cash, another decentralized exchange, to “launder” the stolen funds to gain anonymity.

Pseudonym user Defi_Hanzo was the first to report this development and the first to lose money to the hackers to confirm the DNS attack theory. As seen below, the bad actors took over the Balancer front-end and asked users to change input in the chain where they hold most of their funds.

Once this transaction was completed, bad actors could drain the user’s wallet. DeFi_Hanzo asked the team behind Balancer for a refund after falling victim to the attack.

DeFi’s Public Enemy Number One

Balancer is just one of the many DEX or DeFi applications that have been the victim of some strategy to steal their funds. As Bitcoinist reported, hacks, scams, and other criminal activities in the nascent sector were up 75% by the end of H2 2023 compared to 2022.

Bad actors stole over $650 million over that period, which has continued to rise in the coming months. Of all of the sectors in the crypto industry, DeFi has been the most affected.

The different protocols and applications supported by DeFi platforms lost almost $300 million by the end of H2, 2023. The North Korean affiliate hacker group “Lazarus” has been responsible for many attacks.

As of this writing, Ethereum (ETH) trades at $1,600 with sideways movement in the last 24 hours.

Ethereum ETH ETHUSDT Balancer

Cover image from Unsplash, chart from Tradingview

Posted on

BREAKING: Balancer V2 Pools Under Threat, LP Users In Race Against Time To Withdraw Funds

Balancer, a decentralized finance (DeFi) protocol operating on the Ethereum blockchain, has recently disclosed a critical vulnerability impacting several of their V2 Pools. 

While emergency measures have been implemented successfully to safeguard a significant portion of Total Value Locked (TVL), a portion of funds remains at risk. 

As a precautionary measure, Balancer Labs advises users to withdraw their affected Liquidity Provider (LP) funds without delay. It is important to note that, at present, no funds have been lost, and the vulnerability has not been exploited.

Balancer Discovers Critical Vulnerability

According to the announcement, Balancer Labs promptly executed emergency mitigation procedures upon receiving the critical vulnerability report, successfully protecting over 80% of the affected pools. However, approximately 4% of Balancer’s TVL is still exposed to risk. 

To address this, the Emergency SubDAO 60 swiftly enacted measures to facilitate proportional exits from all impacted pools and implemented a pause on pools that remain within the designated pause window.

While the funds within the mitigated pools (designated as “mitigated”) are believed to be secure, Balancer Labs advises liquidity providers’ users to migrate their holdings to safe pools or initiate immediate withdrawals.

Pools that could not be fully mitigated are labeled as “at risk,” and LPs who are currently part of these affected pools are urged to exit promptly to ensure the safety of their funds. 

Furthermore, Balancer Labs has provided a personalized page on their user interface (UI) to assist users in identifying if their connected wallet is associated with any impacted pools. A streamlined withdrawal process has also been established to guide users through the necessary steps.

Ultimately, Balancer Labs plans to publish a comprehensive post-mortem report, detailing the nature of the vulnerability and the steps taken to address it effectively, aiming to provide users with a clear understanding of the incident and the subsequent mitigation efforts.

Balancer

Following the vulnerability disclosure, Balancer’s native token, bearing the ticker symbol BAL, has experienced a decline of 2.6% in the past few hours. Presently, the token is trading at a value of $3.475.

Featured image from iStock, chart from TradingView.com

Posted on

Balancer’s Native Coin BAL Resilient Amidst Security Emergency

Balancer’s native token, BAL, appears to be holding up despite the platform’s ongoing security issues. On Friday, Jan. 6, the DeFi project tweeted a statement asking liquidity providers on its platform to withdraw their tokens from certain pools valued at $6.3 million. 

Via their official Twitter handle, the decentralized exchange stated there was a security risk that could not be resolved by the platform’s emergency DAO. Thus, they advised LPs to immediately remove their assets from all affected pools. 

BAL Token Holds Its Ground For Now

Earlier today, Balancer confirmed that 85% of the assets in those pools had been moved while still urging LPs to withdraw the remainder as they attempt to resolve the issue at hand. Interestingly, amid the ongoing problem of the decentralized exchange, several investors appeared to have retained their faith in the platform’s native cryptocurrency BAL. 

In the last 24 hours following Balancer’s warning, BAL has appeared unaffected, decreasing in value only by 0.13% based on data from CoinMarketCap. At the time of writing, the ERC-20 token is exchanging hands at $5.35, with its market cap value set at $248,354,921, representing only a 0.11% negative change over the last day. 

BAL trading at $5.34 | Source: BALUSD chart on Tradingview.com

While it is still too early to determine the effect of the Balancer security problem on BAL’s market performance – especially with the details still unknown – these early signs show that BAL may pull through this period, and investors need not panic. 

Is Balancer Experiencing Another Crypto Exploit?

Like every coin in the cryptoverse, there is no given certainty on market patterns. While Balancer has not revealed the nature of the security risk and has assured the public of full disclosure after a successful mitigation, much speculation is still flying around the crypto community. 

Many suspect a smart-contract exploit as it won’t be the first the Ethereum-based DEX would fall victim to such. In August 2020, Balancer was hacked, leading to the loss of $500,000 worth of ETH. 

However, compared to 2020, when Balancer was still a budding crypto project, the DeFi protocol currently ranks as the fourth biggest decentralized exchange with a TVL value of $1.49 based on data from the DeFi analytics platform Defillama.

If the current fears of exploitation are confirmed, the consequences may be quite drastic for a crypto market that is currently trying to recover after the crash of the FTX exchange late last year. 

In November 2022, FTX, formerly one of the biggest cryptocurrency exchanges, collapsed, causing the crypto market to lose billions of dollars. The crash was due to heightened leverage and solvency concerns about FTX’s trading arm Alameda Research, leading to many investors trying to withdraw their assets from the exchange simultaneously, which resulted in a liquidity crisis and, ultimately, bankruptcy. 

Featured Image: ICOnow.net, Chart from Tradingview.com