Balancer Vulnerability: Liquidity Migration Guide

TL;DR:

• Balancer has announced a critical vulnerability that affects multiple Balancer v2 pools across the DeFi ecosystem.
• Swell has two Balancer v2 swETH liquidity pools impacted by this vulnerability. The risk to these pools has been mitigated by Balancer, but it is advised that the liquidity from those pools be withdrawn and migrated accordingly. 
• Swell is working together with the Balancer team and wider Balancer ecosystem partners to ensure a seamless migration for relevant LP positions and integrations on Aura, Pendle, Equilibria, and Penpie. 
• Early migration will be incentivized with boosted pearls to selected venues, including a Balancer v1 pool which is not affected by the vulnerability. 
• The full details on how to withdraw and migrate liquidity are below, and the core team is available in Discord to assist with any questions. 

Following Balancer's announcement disclosing a critical vulnerability affecting their v2 pools, all affected swETH liquidity providers are advised to withdraw liquidity from impacted pools.

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Funds in the impacted pools are safe, but trading on those pools has been disabled and no further yield will accrue.

This vulnerability impacts not only LPers in Balancer boosted pools, but also swETH LPers in protocols built on Balancer, such as Aura, Pendle, Penpie, and Equilibria. 

If you are providing liquidity in any of the impacted pools (listed below), then you can now migrate to the newly created swETH Balancer pool to receive a 2X pearl bonus. As a regular Balancer v1 pool, this new pool is not impacted by the vulnerability as confirmed by the Balancer team. 

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Migrate to get 2x Pearls 

In light of the vulnerability, we will be halting all Pearl rewards for Balancer V2 boosted pools. This will come into effect 24 hours from this announcement.

Following this 24 hour period, you will get 2x Pearls for providing liquidity in the new swETH Balancer pool, and the associated new pool on Aura.

To help address gas costs and ensure the secure migration of your liquidity, this 2x Pearl rate will last for an initial period of two weeks (until Sept 6th, 2023). Please note that Pearls for this new pool will not show in real-time, but will be retroactively applied to your balance at a later date.

Impacted pools:

Balancer

Original Boosted swETH V2 pool [pre-migration 1]

‍This pool was impacted by a previous Balancer issue which prompted a separate liquidity migration (referred to as liquidity migration 1) at the end of July, 2023.

Boosted swETH v2 pool [post-migration 1] 

This pool was set up at the end of July 2023 to provide an alternative to the pool impacted by the previous Balancer issue.

Note that the new Gyroscope swETH/wstETH pool is not affected.

Aura

‍Aura pool [pre-migration 1] 

‍Aura pool [post-migration 1] ‍

Pendle

‍PT swETH-bbaWETH Pool [pre-migration 1]

‍PT swETH-bbaWETH Pool [post-migration 1]

Note that the Pendle PTswETH only pool is not affected.

Equilibria

‍swETH-bbaWETH Pool

Note that the swETH only pool on Equilibria is not affected.

Penpie

‍Aura swETH-bbaWETH

Note that the swETH only pool on Penpie is not affected.

How to migrate your liquidity

To migrate your liquidity to the new Balancer pool and start receiving 2x Pearls, follow the steps outlined below for the protocol you are using to provide liquidity:

Balancer

1. Go to the proportional exit tool on Balancer and follow the steps to withdraw. Balancer will then automatically withdraw proportionately to minimize price impact.
2. If you were LPing in the Original Boosted swETH V2 pool [pre-migration 1], you will then need to go to Aave to unwrap your Aave boosted ETH token (stataEthWETH). Do this by connecting your wallet to Aave and withdrawing the underlying ETH. Otherwise, you can pass straight to step 3.
3. Go to the new Balancer pool and follow the deposit flow. Note that staking your BPT tokens is optional and not necessary to earn pearls.

Aura

1. Go to your Aura deposit and unstake your Balancer pool tokens (BPT).
2. Go to the proportional exit tool on Balancer and follow the steps to withdraw. Balancer will then automatically withdraw proportionately to minimize price impact.
3. If you were LPing in the Aura pool built on the original Boosted swETH V2 pool [pre-migration 1], you will then need to go to Aave to unwrap your Aave boosted ETH token (stataEthWETH). Do this by connecting your wallet to Aave and withdrawing the underlying ETH. Otherwise, you can pass straight to step 4.
4. Navigate to the new Balancer pool and follow the deposit flow. Do not click ‘stake this to earn extra’ if you wish to stake your BPT in Aura.
5. navigate to the new Aura pool and click Stake.

Pendle

1. Go to your swETH/bb-a-WETH deposit on Pendle.
2. Zap out, selecting the output of swETH-bbaweth Balancer LP token.
3. Go to the proportional exit tool on Balancer and follow the steps to withdraw. Balancer will then automatically withdraw proportionately to minimize price impact.
4. If you were LPing in the Pendle pool based on the Original Boosted swETH V2 Balancer pool [pre-migration 1], you will then need to go to Aave to unwrap your Aave boosted ETH token (stataEthWETH). Do this by connecting your wallet to Aave and withdrawing the underlying ETH. Otherwise, you can pass straight to step 5.
   
5. Navigate to the new Balancer pool and follow the deposit flow. Note that staking your BPT tokens is optional and not necessary to earn pearls.

Note that the new Balancer pool is not yet hooked up to Pendle, or Penpie and Equilibria. This is currently expected to happen in a few weeks.

Penpie and Equilibria

1. Navigate to your deposit in Penpie or Equilibria and withdraw your Pendle LP tokens
2. Navigate to the swETH/bb-a-WETH pool on Pendle and zap out to the  swETH-bbaweth Balancer LP token.
3. Go to the proportional exit tool on Balancer and follow the steps to withdraw. 
4. If you were LPing in one of the pools based on the Original Boosted swETH V2 Balancer pool [pre-migration 1], you will then need to go to Aave to unwrap your Aave boosted ETH token (stataEthWETH). Do this by connecting your wallet to Aave and withdrawing the underlying ETH. Otherwise, you can pass straight to step 5.
5. Navigate to the new Balancer pool and follow the deposit flow. Note that staking your BPT tokens is optional and not necessary to earn pearls.

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Note that the vulnerability is limited only to Balancer v2 pools and does not impact Balancer v1 pools. Nevertheless, if you are looking for an alternative to Balancer, then you may also migrate to any of the other pools included in the Swell Voyage.

The Swell team will continue to work actively with the Balancer team as well as Balancer ecosystem partners to ensure a seamless and straightforward liquidity migration out of the old Balancer v2 pools and into the new Balancer v1 pool and other venues.

Should you need further guidance, we are ready to assist. Please reach out in our dedicated Discord channel: Balancer migration. 

‍https://discord.gg/swellnetworkdao‍

Thank you for your patience and understanding.