In a significant display of crisis response, the StakeWise DAO has successfully recovered approximately $20.7 million in stolen crypto assets following the major Balancer V2 exploit. This action, executed on November 3-4, 2025, involved a community-led effort to reclaim funds for users and has provided a notable boost in confidence for the DeFi ecosystem.
A Coordinated Recovery Effort
The recovery operation was a direct response to a sophisticated hack on the Balancer V2 protocol, which resulted in total losses estimated between $117 million and $128 million. The attackers exploited a vulnerability in Balancer V2’s “stable” pools, draining a variety of assets, including ETH-derivatives like StakeWise’s osETH and osGNO.
Using an emergency multi-signature wallet, the StakeWise DAO managed to retrieve 5,041 osETH (worth about $19 million) and 13,495 osGNO (worth about $1.7 million) directly from the attacker’s wallet. This represents a recovery of 73.5% of the stolen osETH and 100% of the osGNO. The DAO has confirmed that all recovered funds will be returned to the affected users in proportion to their account balances before the attack occurred.
Implications for DeFi and Market Stability
This successful recovery has several positive implications for the decentralized finance space and market dynamics.
Firstly, it mitigates potential selling pressure on Ethereum. By recovering a significant portion of the stolen assets, the action reduces the risk of the attacker dumping a large quantity of osETH and osGNO onto the open market, which could have further depressed prices. Following the exploit, the price of Ethereum had dropped over 8%, making this intervention a stabilizing factor.
Secondly, the event showcases a growing maturity in DeFi’s incident response capabilities. The fact that a decentralized autonomous organization (DAO) could coordinate a swift and effective recovery operation demonstrates improved resilience and governance within the ecosystem. This proactive response helps bolster institutional confidence in DeFi protocols and their ability to manage severe operational risks.
It is also worth noting that the core StakeWise protocol and its smart contracts remained secure throughout the incident. The exploit was isolated to the pools on Balancer V2, and users can still safely unstake their ETH directly through the StakeWise platform.
The StakeWise DAO’s successful recovery of a significant amount of funds marks a positive step in DeFi’s evolution, turning a security failure into a demonstration of effective community-led crisis management. This effort not only protects the immediate victims but also strengthens the foundational trust necessary for the ecosystem’s long-term growth.
