The Berachain network has paused operations in response to a vulnerability linked to a recent exploit of Balancer V2. The decision was made by Berachain validators, who coordinated the emergency halt to facilitate an urgent hard fork aimed at mitigating the fallout from the exploit affecting BEX, the platform’s primary decentralized exchange (DEX).
Details of the Emergency Network Pause
On Monday, the Berachain Foundation announced via X that validators had intentionally paused the network. This measure precedes the implementation of the emergency hard fork designed to address vulnerabilities related to the Balancer exploit. The halt will help ensure that affected funds can be recovered before services resume.
- BEX is the largest DEX on Berachain, managing tokens valued at over $50 million.
- The Balancer exploit reportedly took advantage of a vulnerability that previously allowed attackers to drain large amounts from liquidity pools, exceeding $100 million.
- The halted operations allow for the isolation of compromised contracts and recovery of assets.
Impact and Next Steps
The exploit mainly targeted a liquidity pool involving tokens like ethena and honey through complex smart contract interactions. The recovery process is intricate due to the involvement of multiple non-native assets. This situation complicates efforts, as it is not as straightforward as simply rolling back transactions.
Smokey The Bera, co-founder of Berachain, indicated that about $12 million in user funds were at stake. He acknowledged the potential controversy surrounding the decision to pause operations, emphasizing the commitment to user protection despite the challenges posed by the network’s decentralized nature.
Market Response
The fallout from the exploit has significantly affected DeFi markets. The Balancer attack’s effects have been felt across various platforms, including Beets Finance, which reported similar security breaches in its v2 pools. As a result of the incident:
- Balancer’s BAL token has experienced an approximate 8% decline.
- Berachain’s BERA token has dropped by around 6%.
The overall priority for the Berachain team is to restore confidence and secure user assets while addressing these urgent security concerns.
