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Notional Confirms 721.6 ETH Bad Debt from Balancer Exploit

Notional V3’s closure follows a Balancer V2 vulnerability that wiped leveraged vaults, with cross-currency lending users set to transition to Aave for continued operations.

ETH
ARB
AAVE

Summary

Notional Finance confirmed losses of 721.6 ETH from a Balancer V2 vulnerability, affecting fixed-rate lending on Ethereum and Arbitrum. The incident prompted the closure of V3 services on both chains and the migration of cross-currency lending users to Aave. Leveraged vaults lost their entire value. The team plans to issue detailed write-down ratios and withdrawal procedures for impacted users.

Terms & Concepts
  • Balancer: A decentralized exchange and automated portfolio manager enabling customizable liquidity pools on Ethereum and related networks.
  • Arbitrum: A layer-2 scaling solution for Ethereum designed to reduce transaction costs and increase speed.
  • Leveraged Vaults: Investment products allowing users to amplify exposure to assets using borrowed funds, increasing both potential returns and risks.