The Complete Guide to Balancer

Liquidez programable

Pools can be created with custom token weights, swap fees and logic. Developers can build new AMM curves and, in v3, attach hooks to existing pool types.

Gestor de cartera

Arbitrageurs trade against the pool whenever it drifts from its target weights. Liquidity providers (LPs) earn fees on those trades instead of paying for rebalancing.

Eficiencia de capital

The Smart Order Router splits trades across pools to find a better price. The Vault settles only the net token transfers of a multi-hop swap, which saves gas.

The November 3, 2025 Exploit

On November 3, 2025, from 7:46 AM UTC, an attacker drained Balancer V2 Composable Stable Pools on several networks. Per Balancer's post-mortem (November 18, 2025), the exploit relied on incorrect rounding in the "exact out" swap path of stable pools: the required input amount was rounded down, so the caller underpaid. It needed three conditions at once: that rounding error, rate providers that added imprecision to the math, and a pool pushed into a very low liquidity state, which Composable Stable Pools allowed because their own pool token could be swapped in a batch. The post-mortem estimates the theft of user funds at $95 million; a December 2025 Balancer post puts the amount drained at $121 million.

Whitehats acting under the SEAL Safe Harbor Agreement recovered about $8 million, and StakeWise handled another $20 million in osETH and osGNO separately, per BIP-892. Newer V6 Composable Stable Pools were still inside their pause window and were paused within minutes. Balancer V3, every V2 weighted pool and the other V2 stable pool types were not affected, per the post-mortem. Independent analyses were published by Certora and Trail of Bits.

What Changed After the Exploit

• BIP-887 made V3 the only Balancer platform for new liquidity and disabled the V2 pool factories that could be disabled. Existing V2 pools still run, but Balancer encourages LPs to migrate.
• In March 2026, co-founder Fernando Martinelli announced the wind-down of Balancer Labs, citing the legal exposure created by the exploit. The protocol continues through the DAO, the Balancer Foundation and service providers.
• BIP-919 (BAL Tokenomics Revamp) passed on Snapshot in April 2026 with about 2.09 million votes for and 1.75 million against. It halted BAL emissions, discontinued veBAL, sent 100% of protocol fees to the DAO treasury and cut the protocol's share of V3 swap fees from 50% to 25%.
• On August 31, 2026, a rounding bug in legacy V1 pools (immutable 2020 code with no pause function) was exploited for about $1 million, per BIP-930.

The original pool type. Each token has a weight (for example 80/20 or 60/20/20) that sets its share of the pool's value. The pool's invariant keeps the weighted product of the token balances constant.

An 80/20 ETH/USDC pool aims to keep 80% of its value in ETH and 20% in USDC. As market prices move, arbitrageurs trade against the pool until it is back at those weights, and LPs earn a swap fee on each trade.

The SOR queries Balancer pools to find the best path for a trade. For large swaps it can split the order across several pools to reduce price impact. Traders get a better price and more pools see volume.

Aggregators such as 1inch, ParaSwap and CoW Swap can also route trades through Balancer pools when they offer the best price, so pools receive volume from users who never open the Balancer app.

Introduced in Balancer v2 in 2021, the Vault is a single contract that holds and accounts for the tokens of every Balancer pool. Pool contracts only hold the pricing logic. Per the Balancer docs, this split is what makes the rest of the design possible.

A multi-hop swap through the Vault only transfers the net difference at the end of the transaction, which lowers gas costs. The Vault also offers flash loans: tokens borrowed and repaid within one transaction.

Batch swaps run several swaps in one transaction and settle only the net token transfers. This makes routes with many hops cheaper than running each hop separately.

Flash loans let arbitrageurs borrow tokens from the Vault for the length of one transaction, use them to close a price gap between pools, and repay them before the transaction ends. This keeps pool prices close to the wider market. The same batch mechanism, combined with the rounding error, is what the November 2025 attacker used against Composable Stable Pools, per the post-mortem.

Pools ponderados

The most general pool type, with up to eight tokens at custom weights, per the Balancer docs. It suits index-style portfolios that earn trading fees. A common setup is an 80/20 pool that pairs a protocol's governance token with ETH; Balancer's own 80 BAL / 20 WETH pool was still its largest on November 10, 2026, with $4 million in TVL, per DefiLlama.

Fondos estables

Built for tokens that trade near a 1:1 ratio, such as stablecoins (USDC, DAI, USDT) or liquid staking tokens against ETH (wstETH/WETH). Stable pools use a StableMath curve that keeps the price tight around the peg, so swaps between similar assets see less slippage. In v2 the composable variant, the Composable Stable Pool, is the type exploited in November 2025; V3 stable pools use a different codebase.

Linear Pools (v2, deprecated)

A v2 pool type that paired a base token (for example DAI) with its yield-bearing wrapper (for example aDAI from Aave) using a linear pricing curve. Linear pools were the building blocks of v2 boosted pools. Balancer deprecated them after a vulnerability disclosed in August 2023, per the Balancer forum. v3 replaces them with liquidity buffers.

Pools Potenciados

Boosted pools send liquidity that is not needed for swaps to a lending market such as Aave, so LPs earn both swap fees and lending interest. In v3, a 100% boosted pool holds its whole balance in yield-bearing tokens (ERC-4626 vault shares), and a buffer of the underlying token handles swaps, per the Balancer v3 docs.

Cómo proporcionar liquidez

Comprender la Pérdida Impermanente

Impermanent loss (IL) is the gap between the value of your pool share and the value of simply holding the same tokens, when their prices move apart after you deposit. The larger the move, the larger the gap. Pool weights change how much IL you take (our impermanent loss guide works through more examples):

Tokenómica de BAL

veBAL System (Discontinued in 2026)

Until 2026, users obtained veBAL by providing liquidity to the 80/20 BAL/WETH pool and locking the resulting BPT for up to one year. A longer lock gave more veBAL, which decayed as the lock ran down. BIP-919 discontinued it: veBAL no longer earns fees or directs emissions, holders received a one-off payment of 500,000 USDC (BIP-920), and a buyback offer at net asset value, capped at 35% of the treasury, gave holders an exit, per the Balancer docs.

What Happened to Gauge Votes and Aura

As with Curve, a market for gauge votes had grown around Balancer: protocols paid veBAL holders, through platforms such as Hidden Hand, to vote emissions to their pools, and Aura Finance pooled veBAL on behalf of depositors. BIP-919 argued that this incentive market cost more in emissions than the fees it generated. With emissions and veBAL gone, that model no longer applies; check the Aura documentation for how Aura works today (see Sources).

Comisiones de intercambio

The base layer. Every trade through your pool pays a swap fee that stays in the pool, so the value of your BPT rises. Each pool sets its own fee within the range its pool type allows (in v3, 0.001% to 10% for weighted pools and 0.0001% to 10% for stable pools, per the Balancer docs). Nothing needs to be claimed. With $69 million of volume over 30 days across all of Balancer, fee income per dollar is modest.

BAL Emissions (Halted in 2026)

Until April 2026, LPs could stake BPT in a pool's gauge to earn weekly BAL rewards directed by veBAL votes. BIP-919 set the weight of every gauge type to zero, so new BAL rewards stopped. Any incentives still shown on a pool come from partner protocols, in their own tokens.

Rendimiento del Pool Potenciado

In a boosted pool, liquidity not needed for swaps sits in a lending market such as Aave or Morpho and earns interest. That interest comes on top of swap fees, so one deposit earns from two sources, and it also carries the risk of the lending market.

Componibilidad & Estrategias Avanzadas

BPT is a standard ERC-20 token, so it can be used in other protocols. Some common patterns, each with its own extra risk:

When token prices move away from the ratio at which you deposited, your pool share is worth less than holding the tokens. The loss becomes permanent if you withdraw at that new ratio. Volatile pairs carry the most IL. Correlated pairs (stablecoins, LST/ETH) and weighted pools that lean toward your preferred asset reduce it.

Balancer's contracts have been audited by firms including Trail of Bits, OpenZeppelin and Certora (reports are in the GitHub repositories, see Sources), and the protocol runs a bug bounty. Audits did not prevent three incidents: in August 2023 a flaw in some v2 boosted pools was exploited; on November 3, 2025 a rounding flaw in v2 Composable Stable Pools led to an estimated $95 million theft; and on August 31, 2026 a bug in legacy V1 pools, which cannot be paused, was exploited for about $1 million. Check which pool version you use, avoid legacy V1 and V2 pools, and read the latest security notices on the forum.

Pool creation is permissionless: anyone can create a pool. Some pools hold tokens with malicious contracts, rebasing supply or fee-on-transfer logic that behave badly inside the Vault. Verify each token contract in a pool before you deposit. Small pools are also thin: with total TVL at $31 million, many pools hold only a few million dollars or less, so large deposits and withdrawals move the price.

Balancer Labs, the company that built the protocol, announced its wind-down in March 2026; development and operations now depend on the DAO, the Balancer Foundation and service providers funded by protocol fees. BIP-919 passed with a narrow majority (about 2.09 million votes against 1.75 million), so further changes to fees and governance are possible. Lower volume means lower fee income for LPs, and liquidity that leaves a pool widens its spreads.