After the recent exploit that occurred on Balancer, an approximate total loss of funds stands at around $980,000 on Mainnet and around another $215,000 on Optimism. A comprehensive post-mortem article about these events can be found here: Rate manipulation in Balancer Boosted Pools — technical postmortem | by Juani | Balancer Protocol | Sep, 2023 | Medium
Returns always come with risks. Part of keeping your money in DeFi today involves frequent monitoring of your positions. At the same time there are instances of other protocols that have refunded users follow hacks.
In this case, it is believed that a majority of funds affected were stale and no longer actively managed. Therefore, simply air-dropping a full restitution of all funds to all affected LPs does not seem adequate. Instead, the passage of this BIP would give users a time-bound period to report losses occurred by aforementioned incident.
This BIP should be considered an isolate response to a specific event and not be considered precedent setting.
The scope of this pertains to pool implementations developed by Balancer Labs, including any losses on Mainnet, Polygon, Optimism or Arbitrum resulting from the linear pool hack and described exactly in the specification below.
Fantom falls under the complete jurisdiction of Beethoven X and is not included in this proposal.
Build a facility for users to report potential losses on chain.
Widely announce a 60 day window to report, which explains that affected users are expected to use the provided UI element to report losses within this time. Funds lost from contracts or other situations that can not use the reporting system in place may post on this Forum post to get in contact with the maxis to manually register.
Complete a final report of losses per reporting address, and initiate an RFC to to validate the results and discuss options for final payment based on the report.
Acceptance of this BIP is a decision that the research described above should be completed to determine a list of active wallets reporting losses and understand the scale of said losses. Following this further governance should be raised to decide how to handle repayment.