Berachain Pauses Network to Address Balancer-Linked Exploit with Emergency Hard Fork
Berachain validators have initiated an emergency network pause to address a vulnerability linked to the recent Balancer exploit. This decision was announced by the project’s core team, emphasizing the urgency of safeguarding user funds.
Emergency Hard Fork Implementation
The Berachain Foundation stated on X that the network halt was a coordinated effort to execute an emergency hard fork. This fork aims to resolve issues associated with the Balancer V2 exploits affecting the Berachain Exchange (BEX). BEX is Berachain’s primary decentralized exchange, with over $50 million worth of tokens.
Details of the Vulnerability
The exploit appears to have arisen from a vulnerability in Balancer’s vault access control. Earlier on the same day, this flaw allowed attackers to drain over $100 million from various Ethereum liquidity pools, significantly impacting the decentralized finance (DeFi) ecosystem.
Action to Protect User Funds
To mitigate the situation, Berachain’s developers will utilize the emergency hard fork to isolate affected contracts and recover lost assets. Co-founder Smokey The Bera noted that approximately $12 million in user funds were at risk, which prompted the validators’ decisive action.
Complexity of Recovery
Due to the involvement of multiple non-native assets in the theft, the recovery process will be intricate. It cannot be as straightforward as simple block rollbacks. Accordingly, the hard fork may involve more complex rollback or rollfront mechanisms.
Market Reaction
- Balancer’s BAL token experienced an 8% drop in value within an hour.
- Berachain’s native token, BERA, saw a 6% decrease.
Ripple Effects Across DeFi
The impact of the Balancer exploit has also affected other projects within the DeFi market. Beets Finance confirmed a security breach on its v2 liquidity pools, highlighting the widespread ramifications of this vulnerability.
This coordinated response by Berachain underscores its commitment to protecting user assets even as it navigates the challenges posed by the recent exploit.
