In a proactive measure to protect user assets after the $110 million Balancer hack, the Berachain Network validators have made the strategic decision to temporarily halt the network. This decisive action comes as the core team implements an emergency hard fork to address the critical vulnerability related to the Balancer V2 exploit on the Berachain Exchange (BEX).
Notably, the hard fork aims to isolate compromised contracts and recover affected assets. The team is working diligently to resolve the issue and resume operations as soon as possible.
Berachain Network Halted
In a recent X post, the Berachain Network team announced its decision to halt the network in response to the Balancer exploit. The validators team intends to implement an emergency hard fork to recover assets lost in the Balancer hack on BEX. The X post read,
“The Berachain validators have coordinated to purposefully halt the Berachain network as the core team performs an emergency hard fork to address Balancer V2-related exploits on the BEX. This halt has been executed purposefully, and the network will be operational shortly upon recovering all affected funds.”
It is important to note that the Berachain Exchange or BEX is the network’s largest decentralised crypto exchange, with assets totalling over $50 million as of Monday.
Why is This Halt Important?
The team’s swift action aims to mitigate further losses by isolating compromised contracts and recovering affected assets. The emergency hard fork is a crucial step in this process, and the network is expected to resume operations once all necessary measures have been taken to ensure the security of user funds.
In addition, the platform has conveyed its gratitude for the community’s patience and understanding. The team added that a full retrospective would be provided once the situation has been fully addressed. The message read, “Thank you in advance for your understanding, and expect more updates and a full retro soon.”
According to Berachain Network’s Smokey The Bera, the Ethena team has taken significant measures to mitigate potential risks. The steps include disabling bridging out of the Bera, suspending lending markets and deposits for USDe, pausing HONET mints and redemptions, and collaborating with centralized exchanges to ensure that relevant addresses are blacklisted.
Complicating the recovery efforts, the stolen funds include multiple non-native assets beyond Berachain Network’s native token, BERA. This indicates that the resolution won’t be simple. The upcoming hardfork may require complex solutions, such as rollbacks or rollforwards, rather than just reversing a few blocks
What Happened to BEX?
Balancer, a prominent DeFi protocol, has recently suffered a significant exploit that drained more than $100 million in cryptocurrencies. The security breach has impacted multiple chains, including Ethereum, Base, and Berachain. According to PeckShieldAlert, hackers stole around $129 million in WETH, osETH, wsETH, sfrxETH, and rsETH across multiple networks.
Significantly, attackers exploited a smart contract vulnerability in Balancer’s V2 vaults and liquidity pools, with on-chain investigators tracing the issue to a maliciously deployed contract that manipulated Vault calls during the pool initialization process. Co-founder Smokey The Bera noted,
“I’m sure that some won’t be happy about this and we recognize that this could be seen as a contentious decision. Berachain doesn’t benefit from Ethereum’s degree of decentralization, but when user funds are threatened, we act to protect them.”
Following the hack, the BERA token plummeted by nearly 10% over the past 24 hours. Currently trading at $1.66, the token is down by 9.2% and 44% in a week and a month, respectively. Although the market is down by over 10%, reaching $217.02 million, the 24-hour trading volume is still high, hitting $37.77 million, up 95%.
