Gnosis Chain Conducts Hardfork to Return Stolen Funds from Balancer

The blockchain network Gnosis Chain has announced the successful completion of a hardfork aimed at returning funds stolen as a result of a hacker attack on the Balancer protocol. This step was a response to the exploit that occurred in November, allowing assets to be removed from the attackers' control. According to the official statement from the Gnosis Chain team, the node operators' community approved the hardfork decision yesterday, and now the funds are beyond the hacker's control.

Background of the Incident

The attack on Balancer took place in November 2025 (or, according to some sources, 2024), when hackers exploited a vulnerability in the DeFi protocol, stealing assets worth over $116 million. On Gnosis Chain specifically, about $9.4 million in stolen funds were frozen, which have now been recovered through the hardfork. The Gnosis Chain team noted that the assets will be transferred to a DAO wallet, where the community will decide on compensations and distribution. This is not the first such intervention in the DeFi ecosystem, but it highlights the flexibility of governance in networks like Gnosis.

Earlier, in November, Gnosis Chain had already conducted a softfork to freeze the stolen assets, which served as preparation for the full hardfork. According to analysts, the hardfork was based on on-chain data that confirmed the funds are no longer accessible to the hackers. In total, the Balancer exploit affected several networks, but Gnosis Chain became one of the first where such a radical solution was applied for recovery.

Community Reaction and Debates

The decision for the hardfork elicited mixed reactions in the crypto community. Some users support the move, calling it "smart" and "based" for combating hackers, referencing precedents like the DAO hack on Ethereum. For example, one X user wrote:

"The power of centralization"

Experts are also divided: on one hand, the hardfork demonstrates the community's effectiveness in crisis situations; on the other, it raises questions about blockchain immutability and potential risks to tokenomics, especially for bridged assets like USDC. The Gnosis Chain team urged all node operators to update to avoid penalties, emphasizing that this is a community decision.

Market Impact

At the time of writing, the price of the GNO token (Gnosis) remains stable, but the event may affect trust in DeFi protocols. Analysts note that such cases underscore the need for enhanced security in ecosystems like Balancer v2. Gnosis Chain, which has been operating for 7 years without downtime, continues to position itself as a reliable platform for onboarding global finance.

This event is another example of how DeFi communities adapt to threats, but it also reminds us of the eternal debates between user security and decentralization. Stay tuned for updates, as the Gnosis Chain DAO will soon announce the distribution of the recovered funds.