Ethereum News Update: Berachain Suspends Network Operations to Prevent $116M DeFi Theft, Prioritizing Security Over Decentralization

Berachain, a blockchain network developed on

, has suspended its network to resolve a severe security flaw associated with V2 pools on its BEX decentralized exchange. The Berachain Foundation revealed an emergency hard fork on November 3, aiming to contain a security incident that has impacted decentralized finance (DeFi) platforms, as detailed in a . This action comes after a $70.6 million exploit hit Balancer, a liquidity protocol, where attackers siphoned assets like WETH, osETH, and wstETH from several pools, according to a .

The breach, initially reported on November 3, saw more than $70 million in digital assets moved to a newly created wallet, with some estimates climbing to $116 million as the attack spread across Ethereum’s Layer 1 and Layer 2 networks, including

, Base, and Optimism, as reported by . Berachain’s suspension of operations highlights the seriousness of the situation, as validator nodes worked together to stop activity while the core team carried out the hard fork, according to Lookonchain. “We take immediate action to safeguard user funds when they are at risk,” a Berachain spokesperson said, emphasizing the platform’s focus on security even though it is less decentralized than Ethereum, as mentioned in a .

Following the exploit, Balancer’s native token BAL declined by 8%, and Berachain’s BERA dropped 6%, reflecting investor unease, according to CoinDesk. This breach is Balancer’s third major security issue since 2020, raising doubts about DeFi protocol robustness. In 2023, Balancer lost $238,000 to a phishing attack via DNS hijacking, and in 2020, a $500,000 exploit took advantage of vulnerabilities in deflationary token processing, as noted in a

. The current incident, however, far surpasses previous losses and has attracted attention from security firms like PeckShield and Cyvers, which identified suspicious transactions totaling $84 million across several blockchains, according to .

The attacker exploited weaknesses in Balancer’s smart contracts, especially infinite approval mechanisms for wrapped ETH derivatives, enabling unauthorized token creation and rapid asset withdrawal, Coinotag reported. Blockchain analysts observed that the perpetrator divided the stolen assets among new wallets, complicating recovery. Meanwhile, a previously inactive whale withdrew $6.5 million from Balancer pools, indicating increased caution among major holders, according to the same Coinotag analysis.

Berachain’s swift action stands in contrast to Balancer’s slower response, as the latter has not yet released an official statement. Moderators on Balancer’s Discord have urged users to avoid interacting with suspicious contracts until more information is available, as reported by

. This event has reignited discussions about DeFi security, with experts stressing the importance of ongoing smart contract reviews and multi-signature protections, as highlighted in a .

As the DeFi sector deals with the aftermath of this attack, market volatility persists. Bitcoin’s 19% liquidation event in October—when its price fell from $126,000 to $105,000—has further shaken investor trust, according to a

.