Balancer DeFi Exploit Drains $128M Across Multiple Blockchains

Balancer, a leading DeFi platform, suffered a significant exploit affecting its v2 Composable Stable Pools, resulting in losses exceeding $120 million across multiple blockchain networks. The attacker exploited a vulnerability involving rounding-down precision errors in Balancer Vault's swap calculations, enabling manipulation of token prices and unauthorized withdrawals from the protocol's vaults. The attack caused widespread panic, triggering reflexive stress events similar to traditional bank runs, leading to rapid withdrawals and a temporary depeg of Stream Finance's xUSD token, which relies on Balancer pools. Despite extensive prior audits and bug bounty programs, Balancer's security was compromised, raising broader concerns about transparency, risk management, and systemic vulnerabilities in DeFi infrastructures. In response, affected platforms like Berachain and Sonic Labs executed rapid hard forks and froze attacker wallets, while Balancer's engineering teams are actively investigating and working on recovery efforts. The incident underscores the tension in DeFi between innovation and the need for enhanced transparency, robust Proof of Reserve systems, and real-time risk assessment to protect users and maintain trust.