Balancer V1 Recovery Plan Sparks Uncertainty Over LP Payouts

The Balancer V1 recovery proposal aims to allocate $1.39 million in recovered ETH among liquidity providers (LPs) in 120 legacy pools affected by an August 31 exploit.

The proposal would use attack-time losses and pre-exploit pool balances, but no claim window is open as the plan still awaits a vote and publication of address-level claim data.

Under the proposed allocation method, recovered ETH would first be allocated to each pool according to its share of the total dollar loss at the time of the attack. Then, each pool's allocation would be divided among LPs based on their pool-token holdings at Ethereum block 25,872,248.

The proposal does not guarantee full reimbursement and carries a legal condition: claimants must provide digital consent releasing Balancer Labs, Balancer DAO, Balancer Foundation, affiliated parties, and service providers from liabilities related to the incident.