Balancer recovered $1.4 million of stolen funds, but liquidity providers are still struggling to get compensation in the short term

Balancer V1 Refund Allocation Scheme out: 296.4 How will the attacked liquidity provider be reimbursed?

The Balancer community recently submitted a redemption proposal in response to the August 31st attack on V1 version, with plans to distribute 296.401711 units of ETH that have been returned to 120 liquidity providers within the old liquidity pool . However, the exact amount available at various addresses has not yet been announced and collection channels are not open.

Source and size of the recall

The proposal shows that approximately $1.39 million worth of token was withdrawn from the associated liquidity pool at the time of the attack. From September 8 to September 16, a total of five ETH returns were received by Balancer DAO and multisig wallets, respectively from one major gray hat hacker hacker , three anonymous white hats, and block builder Ultrasound.money, totaling 296.401711 of the aforementioned ETH .

It should be noted that this figure is only the amount of reimbursement registered in the proposal and does not represent a full compensation commitment. Attack losses are calculated in dollars at historical prices, while recovery pools are priced at ETH , and there is no set percentage for recovery.

Allocation rules: calculated by the ratio of losses to snapshots before an attack

Specific allocations are made in two steps: first, the ETH recovered is divided into each liquidity pool according to the proportion of total dollar losses incurred by each pool during an attack; second, a secondary allocation within the pools takes place based on the number of pools token held by liquidity providers at block 25,872,248 of Ethereum ;

This block was chosen because it happened to be located before the first attack transaction (block 25,872,249). A single snapshot taken prior to an attack could cover all 120 affected pools, including those that were subsequently subjected to a mimicry attack.

Until these documents are published, individual liquidity providers will not be able to calculate how much they can get back.

Voting is still required, and legal immunity applies

According to the proposal design, applicants are required to digitally sign a consent form releasing Balancer Labs, Balancer DAO , Balancer Foundation and related parties and service providers from liability in connection with this event. Compensation will be paid at ETH and processed on a case-by-case basis by an applicant whose contractual address is multisig .

As of September 20, the forum post is still marked as BIP-XXX and does not have a Snapshot voting link. The proposal states that only after the vote has been passed will the application data be released and the application mechanism deployed, so V1's application window has yet to open and the start date is unknown.

Asset allocation in the shutdown program

The recovered pool is independent of the Balancer assets in question that have been requested to be frozen. Its liquidation proposal specifies that funds retrieved from a protocol attack are owned by affected liquidity providers and do not fall within the scope of treasury allocations for BAL holders.

This distinction ensures that recovery is reserved for the harmed user, but pending votes and unpublished distribution data mean that the current scheme only outlines a path to recovering rather than an already determined amount of compensation which can be credited immediately.