Balancer Hit by $116M DeFi Exploit Amid Market Selloff

The exploit unfolded around 7:48 AM UTC when an attacker drained approximately $116 million from Balancer’s protocol vaults through sophisticated targeting of V2 Composable Stable Pools. On-chain data reveals massive, unusual outflows from Balancer’s “0xBA1…BF2C8” address to an external wallet, including 6,587 WETH worth approximately $24.5 million, 6,851 osETH valued at $26.9 million, and 4,260 wstETH amounting to $19.3 million. The scale and precision of these transfers across multiple high-value assets indicate a carefully coordinated attack rather than random vulnerability exploitation.

Balancer confirmed the breach affected specifically V2 Composable Stable Pools that had been operational for several years, noting that some pools were outside the protocol’s pause window, leaving them vulnerable to exploitation. The protocol team immediately halted all pools that could be paused, placing them in recovery mode while confirming that Balancer V3 and all other pool types remained unaffected by the attack. According to the protocol’s official statement, the exploit was isolated exclusively to V2 Composable Stable Pools, though the damage had already been done with one of the largest DeFi security breaches of the year.

In the aftermath, Balancer warned users about fraudulent communications circulating across social media platforms, emphasizing that official updates would only come through its verified X account and official Discord channels. The protocol confirmed it is working with leading security researchers and legal teams to investigate the incident thoroughly, with plans to release a comprehensive post-mortem analysis once the investigation concludes.

According to blockchain analytics firm Lookonchain, the Balancer exploiter has already begun converting the stolen assets into Ethereum, accelerating concerns that the attacker intends to consolidate and move value quickly before recovery mechanisms can engage. The conversion of large amounts of liquid-staking tokens and wrapped assets into ETH not only solidifies the hacker’s control over the stolen funds but signals a clear intent to exit positions entirely rather than negotiate or return funds—a troubling development for victims and the protocol’s recovery prospects.

This rapid asset conversion is unfolding during one of the sharpest cryptocurrency market pullbacks in recent months. Ethereum has fallen below the critical $3,500 psychological and technical support level, while Bitcoin has broken beneath the $105,000 support zone, intensifying fears of deeper downside as market liquidity thins and investor sentiment deteriorates significantly. Altcoins, already under pressure from macro-driven derisking, are experiencing heavy bleeding as capital rotation stalls and speculative flows evaporate across the sector.

For Balancer, the timing compounds the severity of the crisis. A major security breach during such fragile market conditions magnifies financial losses, erodes user confidence more rapidly, and increases the risk of liquidity dislocations throughout the DeFi ecosystem. The entire sector is now closely monitoring both the hacker’s next moves and Balancer’s recovery plan as the industry navigates heightened stress on both technical infrastructure and market sentiment fronts.

The BAL token has entered a phase of sustained weakness following the confirmed exploit, with the weekly chart showing a clear downtrend that has now intensified dramatically. After trading near the $1 region for months, the token has broken significantly lower, currently hovering around $0.80 and showing a sharp weekly decline. The chart reflects exceptionally heavy selling volume, indicating that the security breach accelerated an already fragile market structure that was vulnerable to negative catalysts.

Technically, BAL remains firmly below both the 50-week and 200-week moving averages, reinforcing a long-term bearish trend with no immediate signs of reversal. Each attempt to establish support has been met with lower highs and subsequent breakdowns, indicating persistent distribution and a complete lack of sustained buyer interest. The recent spike in volume during the selloff confirms capitulation behavior rather than accumulation, as fear spreads rapidly across the DeFi sector following the high-profile exploit.

Market sentiment around BAL has deteriorated further given the exploit’s unfortunate timing. With Ethereum trading below $3,500, Bitcoin losing critical support near $105,000, and altcoins bleeding heavily across the board, risk appetite has reached a significant low point throughout cryptocurrency markets. For BAL to show any meaningful recovery signals, it would need to reclaim psychological support near $1 and stabilize volume flows—a challenging prospect given current market conditions and the protocol’s security concerns. Until these conditions materialize, BAL’s price action remains highly vulnerable, and further downside cannot be ruled out as confidence rebuilds slowly in the aftermath of this substantial security breach.