Balancer hack: claim process

General
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Why We Acted

There were a total of 344 wallets affected by an upstream exploit on Balancer that involved over 5% of Gnosis TVL at the time of the attack.

Gnosis DAO provides a backbone of liquidity for the network and accounted for the majority of the affected funds, representing less than 2% of the total DAO treasury. But, beyond the DAO’s own exposure, over 340 individual wallets were impacted. Choosing collectively not to protect users would be in direct conflict with our mission of mainstream adoption and low-risk DeFi.

To remove any future question, we have begun work on a clear and objective framework for when and how the network intervenes in the event of any future exploit. The next stage of that will be published in coming days and we look forward to discussing it with you.

Community Debate: Immutability vs. Accountability

The hard fork triggered one of the most substantive governance debates in Gnosis Chain’s history, playing out primarily on the Gnosis Forum across 40+ posts. We believe it is important to present both sides transparently.

Arguments in Favor

Lefteris Karapetsas (founder of Rotki, privacy-focused portfolio tracker):

“This has nothing to do with abstract debates on decentralization. When a clearly identified exploit of this scale on an established protocol occurs, and when the chain has the technical and social ability to remediate it, choosing not to act is not neutrality. It’s rather a decision to let the consequences stand. […] A chain that cannot correct an exploit when it has the tools to do so is not ‘more decentralized’, it is simply less accountable.”

Joseph Schiarizzi (Ethereum builder, on X):

“Anyone who criticizes this is wrong. Taking a stand and fighting back is the right thing to do.”

Serenita (Luca) — a major validator operator with delegated stake — supported the fork while calling for a governance framework:

“We are currently not aware of broad discontent about this rescue operation, and therefore plan to support it with the intent to return hacked funds to their owners.”

Arguments Against / Concerns

MichaelRealT (RealT protocol team) raised the precedent problem:

“Are we going to perform a hard fork for every wallet hack or anything else? Won’t this lower the quality of applications, which will assume that a hard fork is possible in case of a hack? […] To accept a hard fork, you need a strict framework that no one can deviate from, a framework applied by the DAO for the DAO itself, not for the needs of a group of people.”

TheVoidFreak articulated the immutability erosion risk:

“If the only learning is: The blockchain is actually not immutable as there only needs to be a consensus of less than 60 people to overwrite the blockchain state and it would be done fast as long as these people see it fit. Then this would be the worst possible learning from this incident.”

NolanV raised concerns about unequal treatment, pointing to a previous incident involving the same Balancer EURe/sDAI pool where an oracle misconfiguration caused hundreds of thousands of euros in losses to LPs, but no intervention was made:

“When it’s your own money that’s lost, you act much more quickly than when it’s the money of dozens of individuals. I’m not criticizing your intervention. […] What I’m criticizing is the double standard.”

NolanV also challenged the decentralization assumptions, presenting data suggesting the effective number of independent validators was far lower than the headline ~340,000 figure, with perhaps only 100–300 truly independent operators.

Augus urged caution on a philosophical level:

“Don’t set the precedent. ‘Recovery method frameworks’ can corrupt. If you show you can do something, eventually you will be compelled to do it — and it might not be a noble cause like ‘user asset recovery’ but instead censorship/theft.”

kokialgo questioned the process:

“I do not feel confident about executing a hard fork while notifying all validators only 10 days in advance. It feels rushed, even though I know you have been working extremely hard since the hack to find the best possible solution.”

The DeFi Ignas Perspective

Prominent DeFi analyst Ignas supported the fork but echoed the moral hazard concern:

“What if a team member or somebody influential gets hacked, then he would push for a fork? But if some users without power get into trouble, the team might not intervene as they aren’t affected. This creates a serious moral hazard.”

The Resulting Framework Discussion

In response to community concerns, we acknowledged the need for a formal governance framework. A separate forum thread, “A Framework for the Future”, was opened to develop principles governing when and how such interventions should be considered in the future. The general consensus emerging from the debate was:

  1. The default is no intervention.
  2. Any exceptions must be justified against clear and pre-aligned criteria.
  3. These should be defined in the security framework that is currently in discussion.
  4. Our longer term goal is to make interventions progressively harder and eventually impossible.

Timeline of Events

Date Event
November 3, 2025 Balancer V2 exploit occurs. ~$120-128M drained across multiple chains, ~$9.4M on Gnosis Chain.
November 3, 2025 Monerium freezes compromised EURe balances. StakeWise explores freezing osGNO. Bridge governors halt bridge activity.
November 3–5, 2025 The soft-fork was developed with the help of client teams and core developers.
November 5, 2025 at 1:30pm UTC The emergency soft fork was discreetly coordinated with validators.
November 5, 2025 at ~5:00pm UTC An issue with the soft fork was disclosed
November 7, 2025 at 1:30pm UTC A new soft fork was deployed by a majority of validators.
November–December 2025 6 weeks of hard fork development across all 4 EL client teams, extensive shadow fork testing.
December 8, 2025 Hard fork specification PR (specs#87).
December 12, 2025 Hard fork announced on Gnosis Forum. Reth v1.0.0 and Erigon v3.3.2 released.
December 13, 2025 Community debate heats up on forum.
December 14, 2025 Geth v1.16.7-gc.9 released.
December 15, 2025 Spec PR merged. Rescue Safe multisig signers updated to match DAO configuration.
December 19, 2025 Nethermind v1.35.8 released.
December 22, 2025 Hard fork activates at 16:11:40 UTC. Attacker’s EOA code replaced with HardcodedForwarder. Funds now under DAO control.
December 23, 2025 Successful hard fork execution confirmed. Remaining node operators urged to update.

Conclusion

The Balancer recovery hard fork represents a unique case study in blockchain governance, emergency response, and the tension between pragmatism and principle.

On the technical level, the approach was deliberately minimal: an irregular state transition that avoided rewriting history, preserved the chain’s integrity, and used existing EVM mechanisms (EIP-3607) to neutralize the attacker’s key. The implementation across four independent execution clients in six weeks was a significant engineering effort.

On the governance level, the episode exposed real tensions within our community. The decision was ultimately made by validator consensus: each operator chose whether to upgrade. We take the community’s call for a formal governance framework seriously, and work on that front is underway. We also urge GNO holders to stake with smaller node operators or privately, instead of delegating huge amounts of GNO to a few big ones.

On the philosophical level, the debate mirrors a recurring question in blockchain governance: when — if ever — should a community use its collective power to override the outcome of code execution? Our answer was pragmatic: act now to protect users, and formalize the rules for next time.

We believe that in due course, validators should not be able to censor transactions and the underlying network infrastructure should be actually blind. We commit to working towards this future, but in the meantime encourage a community discussion on how and when the community should wield this power it still has when acting in concert.

With the hard fork behind us and the claim process now underway, we are focused on returning every recovered token to the people it belongs to. If your address is in the CSV above, please review the amounts carefully and let us know if anything looks off. The claim page will go live once the community review is complete.

References

Client Releases

Client Version Repository Release
Nethermind v1.35.8 NethermindEth/nethermind Release
Erigon v3.3.2 erigontech/erigon Release
Reth v1.0.0 gnosischain/reth_gnosis Release
Geth v1.16.7-gc.9 gnosischain/go-ethereum Release
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