DeFi platform Balancer to reimburse $500k in hack losses; community threatens legal action

Published on by Cryptoslate | Published on

It's been a difficult 48 hours for DeFi project Balancer.

Riding on the DeFi yield farming hyper, Balancer saw an influx of pool funds locked in its protocol, which in turn, attracted the bane of any technology project - the attention of hackers and loophole opportunists.

Balancer Labs tweeted Tuesday that all liquidity pools affected in the $500k hack would be fully reimbursed.

After thorough discussions with the community, the Balancer Labs team decided that it will fully reimburse all the liquidity providers who lost funds in the attack of yesterday.

In a post, Balancer CEO Fernando Martinelli said the platform experience an unprecedented surge in both users and liquidity last week, leaving developers to play "Catch up" on scaling the platform.

Twitter commentators said Balancer was, perhaps, setting a "Dangerous" precedent for future DeFi projects and security lapses.

He said Balancer Labs will only reimburse the losses of liquidity providers in the attack as the team had already received a specific bug bounty report prior to the hack.

Statera, on its part, tweeted it was working with Balancer and actively collaborating on solutions.

The firm added it would be reimbursing STA to all liquidity providers affected by the hack, while Balancer will reimburse the four other tokens.

In working with Balancer we are actively collaborating on solutions.