Berachain has implemented an emergency network halt after identifying a security vulnerability linked to the recent Balancer V2 exploit, the project’s core team announced on Monday.
According to the Berachain Foundation’s statement on X, validators acted swiftly to pause the blockchain and enable the deployment of an emergency hard fork intended to isolate the affected contracts and restore compromised assets. The network, which features the BEX decentralized exchange (DEX) holding over $50 million in tokens, is expected to resume operations once all impacted funds have been secured.
The security weakness originates from a similar access control flaw in the Balancer vault that attackers exploited earlier in the day to siphon off tens of millions from liquidity pools. This breach resulted in losses exceeding $100 million in total across the Ethereum decentralized finance (DeFi) ecosystem, impacting not only Balancer itself but also its derivatives such as Beets Finance, which confirmed a compromise in its v2 pools.
Berachain’s incident primarily involved a liquidity pool containing ethena and honey tokens. The exploit employed a sophisticated sequence of smart contract interactions to drain assets. Unlike straightforward rollback procedures, Berachain faces a more complex recovery process due to the involvement of multiple tokens beyond its native BERA token. Solutions under consideration include both rollback and roll-forward hard forks to effectively mitigate the damage.
Co-founder Smokey The Bera highlighted on X that approximately $12 million in user assets were endangered, underscoring the urgency behind the validators’ consensus to halt the network. He acknowledged that the decision might be met with some criticism but emphasized the necessity of prompt action to protect users’ funds, given Berachain’s relatively lower degree of decentralization compared to Ethereum.
In the market aftermath, tokens linked to the incident have experienced notable declines. Balancer’s BAL token dropped roughly 8% within an hour following the exploit, while Berachain’s native BERA token declined about 6% during the same period.
Developers are currently focused on finalizing the emergency hard fork rollout to restore security and stabilize the network. Once the compromised funds are recovered and contract issues addressed, Berachain intends to reopen its network for normal operation.
This event highlights ongoing risks within DeFi infrastructure, stressing the importance of robust security measures as projects continue to evolve in a rapidly expanding ecosystem.
