- Validators have forced a pause in the Berachain network due to a vulnerability in the Balancer V2 implementation at BEX.
- The Berachain Foundation’s core team is working on an emergency hard fork to patch the problem.
- The group also admitted to losing funds during the pendency of the exploit.
The cryptocurrency market is undoubtedly having a bad start this week as liquidations continue to pile up to over half a billion dollars in the last 24 hours. Berachain (BERA), however, has gotten the short end of the stick as its price fell over 10% from a $1.85 low to a $1.66 low intraday.
As of writing past 12 noon (UTC) on Monday, the Berachain network is reeling from the effects of a recent incident, leading to a halt in its network operations and loss of funds.
Berachain Pauses Network Activities
According to the Berachain Foundation, its validators have coordinated to purposely trigger a pause in its network. The temporary halt aims to prevent further compromise as the core team performs an emergency hard fork. The action also extends to HONEY stablecoin minting.
The problem stemmed from a Balancer V2 exploit at BEX, the native decentralized exchange (DEX) of Berachain. For context, the Balancer automates liquidity provision through Automated Market Maker (AMM) pools within the Berachain network.
Without delving too much into the technicalities, the team explained that the exploit primarily compromised the Ethena/Honey tripool through a relatively complicated smart contract transaction. Due to the problem affecting non-native assets, not just BERA, the core team claimed that the rollback/rollforward would require more than a simple hard fork, thus necessitating the pause in the network until a complete solution is finalized.
Loss of Funds
The Berachain Foundation admitted to losing funds in its announcement. However, it has yet to reveal the actual numbers involved.
An unofficial tally from various sources, like Peckshield at the time of writing, shows that losses linked to the Balancer exploit in Berachain have already risen to $128.6 million. It drained around $110 million on Ethereum (ETH), while the rest of the losses occurred across Base (BASE), Polygon (POL), Arbitrum (ARB), Optimism (OP), and Sonic (S).
The Perpetrator/s
Investigation is still ongoing, as the Berachain Foundation is still on radio silence. Despite that, some crypto community members are already throwing in their theories.
The most popular narrative is that it may be the handiwork of the Lazarus Group, the infamous North Korean hacking outlet. But then again, it’s still too premature to be pointing fingers without much information available at the moment.
What’s your Reaction?
+1
0
+1
0
+1
0
+1
0
+1
0
+1
0
+1
0
