Berachain Halts Network to Contain Balancer-Linked Exploit, Conduct ‘emergency Hard Fork’

Emergency Hard Fork to Address Balancer V2 Exploit on Berachain Network

Berachain validators halted their network to address a vulnerability linked to the Balancer V2 exploit, affecting the BEX decentralized exchange (DEX). The pause allows for an emergency hard fork aimed at isolating compromised contracts and recovering affected assets before resuming operations. This move comes as approximately $12 million in user funds are at risk.

Berachain’s Network Halt

The Berachain Foundation announced that the network halt was executed purposefully, with core team members performing an emergency hard fork to address Balancer V2-related exploits on the BEX. The halt has been coordinated by validators and is expected to be operational shortly upon recovering all affected funds.

Impact of Exploit

The issue stems from a similar Balancer vault access control flaw that enabled attackers to drain tens of millions in assets from liquidity pools earlier in the day, resulting in over $100 million worth of various tokens being drained. The exploit primarily hit a liquidity pool containing ethena and honey tokens, using complex smart contract interactions.

Complicated Nature of Fix

Fixing the issue isn’t as simple as just rolling back a few blocks because stolen funds involved multiple non-native assets, not just Berachain’s own token, BERA. The fork won’t be straightforward and could potentially involve rollback or rollfronts to address the vulnerabilities fully.

Industry Impact

The Balancer exploit has had ripple effects across DeFi markets, impacting Balancer and several of its forks, including Beets Finance, which also confirmed a security breach on its v2 pools. The BAL token is down about 8% in the past hour, while Berachain’s BERA is down 6%. These movements highlight the broader impact on related projects and tokens.

Industry Response

The incident underscores the ongoing challenges faced by decentralized finance platforms in securing their systems against sophisticated attacks. While some stakeholders might be unhappy with the network halt, Berachain’s co-founder Smokey The Bera emphasized the need to protect user funds, stating that when such threats arise, action must be taken swiftly.

Experts in the DeFi space have highlighted the importance of robust security measures and regular audits to prevent similar incidents. This event serves as a reminder of the dynamic nature of the blockchain industry and the constant vigilance required to ensure platform integrity.