Fund recovery on Gnosis after the Balancer attack sparks debate over blockchain immutability

Gnosis Chain recently executed a governance-approved hard fork to recover approximately $9.4 million in assets locked after the Balancer hack. The action triggered mixed reactions within the developer and validator community, with questions raised about the precedents set by this intervention.

Incident Context and Measures Taken

The Balancer V2 protocol suffered a significant attack that drained around $128 million across multiple chains, including Gnosis. Following this event, a soft fork implemented in November 2025 froze funds identified as belonging to the attacker on Gnosis Chain. To complete the recovery of these assets, Gnosis collaborators and validators prepared a hard fork that was finally deployed on December 22.

Requirements for Node Operators

Gnosis Chain publicly notified all remaining operators that they must update their nodes to avoid sanctions. Penalties for non-compliance include loss of staking rewards and reductions in funds during prolonged inactivity or disruptive behavior, enforced through the GNO token.

Nodes had a ten-day window to perform the necessary update following the initial announcement by Philippe Schommers, Gnosis Infrastructure Lead.

Divergent Perspectives on Precedents

The community is divided regarding the implications of this decision. Some acknowledge the transparency of the process, while others question the impact on system integrity. Ignas DeFi posed fundamental questions: “Do we perform a hard fork after every attack? Only when losses exceed 5% of TVL? Why not 3%? Will protocol developers assume that the chain will intervene in case of errors, thereby lowering security standards?”

Ignas also pointed out that the initial soft fork had already compromised Gnosis’s neutrality, and that other chains have implemented similar actions in response to the same Balancer hack.

Parallels with Other Chains

This is not the first intervention of this kind. Berachain and Sonic took comparable measures after the Balancer attack. Similarly, Sui faced a similar situation when it suffered an exploit of $162 million in CETUS. The Sui Foundation, Cetus Protocol, and OtterSec received community approval to use special signature mechanisms and confiscate funds from the attacker.

Current Market Data

The GNO token maintains a market capitalization of $367.69 million, with a current price of $139.30 and a -0.35% change in the last 24 hours. SUI, on the other hand, is at $1.78, with a -1.75% movement over the same period, and a market cap reaching $6.75 billion.

Final Reflections

Harry Donnelly, founder of Circuit, characterized the Balancer incident as “a serious warning” for the DeFi ecosystem, highlighting that Balancer was considered “one of the most trusted names” with “a compliance culture backed by rigorous audits.”

Gnosis’s hard fork will likely set precedents that other chains will consider in future decisions regarding intervention in security events.