Gnosis Executes Hard Fork to Secure Funds Lost in November Balancer Hack

TLDR

• Gnosis executed a hard fork to recover funds stolen in the $116 million Balancer exploit.
• The hard fork followed a soft fork in November by Gnosis validators to address the attack.
• Gnosis reports that the stolen funds are now beyond the hacker’s control, signaling recovery.
• Gnosis plans discussions on how users will reclaim assets and how contributors will be compensated.

In an effort to recover funds lost in the November Balancer exploit, Gnosis chain operators executed a hard fork on Monday. This decision comes after a majority of Gnosis validators adopted a soft fork to address the exploit that affected Balancer-managed contracts on the Gnosis Chain. Gnosis announced that the funds are no longer under the hacker’s control, signaling partial or full recovery.

The hack, which took place on November 3, resulted in a loss of more than $116 million in digital assets. The stolen assets included millions in staked Ether (ETH), which were transferred to a new wallet. Gnosis’ hard fork was executed to prevent the hacker from accessing the remaining stolen funds and initiate recovery processes.

Gnosis Chain’s Response to the Exploit

The Gnosis hard fork followed the actions of its validators, who had previously adopted a soft fork to mitigate the damage caused by the exploit. This soft fork was aimed at temporarily securing the platform and ensuring that the hacker could not further drain assets from the affected contracts. According to Gnosis, the soft fork was a necessary first step to contain the exploit, and the subsequent hard fork was designed to recover the funds that had already been moved

Gnosis communicated the goal of completing the recovery process by Christmas. “We are focused on enabling funds to be recovered by Christmas,” said Philippe Schommers, Gnosis’ head of infrastructure. “Once the funds are in a DAO-controlled wallet, we will discuss how users can claim their assets and how contributors can be recognized.”

Ongoing Discussions on Fund Recovery and Compensation

While the immediate focus has been on securing the funds, Gnosis is also engaged in ongoing community discussions. These talks are centered on how affected users can reclaim their stolen assets and how the individuals and organizations involved in the rescue efforts will be compensated. Gnosis has made it clear that these matters will be addressed after the funds are secured, ensuring the recovery process is completed safely.

The hard fork has been seen as a crucial step in regaining control over the stolen funds. With over $28 million of the stolen funds already recovered by white hat hackers, Gnosis is working towards securing the rest. However, it is still uncertain whether all the assets will be fully recovered, and much depends on the ongoing efforts of the Gnosis community and its validators.

The Balancer Exploit and Its Aftermath

The Balancer exploit, which was reported on November 3, caused significant financial damage, with more than $116 million in digital assets stolen. The attack primarily targeted the Balancer V2 Composable Stable Pools, which had been audited by multiple security companies. Despite 11 audits conducted on the platform’s smart contracts, the exploit was not prevented.

Following the exploit, the Balancer team was able to recover a portion of the stolen funds, around $28 million, with the help of white hat hackers. However, the remaining funds remained in the hacker’s control, and efforts to retrieve them continued, culminating in Gnosis’ hard fork.

Gnosis is optimistic about the possibility of full recovery and continues to prioritize securing the remaining funds. The hard fork represents a decisive action to mitigate the effects of the hack and restore funds to users who were affected by the exploit.

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