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Why Balancer Lost $120M While Better Incentive Design Could Have Changed Everything
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This story was originally published on HackerNoon at: https://hackernoon.com/why-balancer-lost-$120m-while-better-incentive-design-could-have-changed-everything.
Balancer lost $120M while protocols with better incentive design could prevent such failures through game theory and dynamic rewards
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On November 3, 2025, Balancer lost over $120 million in one of the largest DeFi breaches of the year. Attackers exploited a rounding direction error that had existed in the code for years. Users could only watch as their funds drained or race each other to the exit.