Cardano News Today: Vulnerabilities in DeFi Smart Contracts Reveal Underlying Systemic Risks

The decentralized finance (DeFi) industry is under increasing examination following a string of major hacks that have revealed weaknesses in its systems, with the most recent incident resulting in the theft of more than $116 million from the Ethereum-based platform

. This breach, verified by a referencing blockchain security company PeckShield, represents the third significant security lapse for Balancer since 2020 and draws attention to the instability of DeFi’s smart contract frameworks.

On November 3, 2025, attackers took advantage of a flawed access control in Balancer’s boosted pools, which utilize Ether derivatives. By exploiting the `manageUserBalance` function, the perpetrators siphoned off assets such as 6,587 WETH ($24.46 million), 6,851 osETH ($26.86 million), and 4,259 wstETH ($19.27 million) from the

mainnet as well as cross-chain platforms like Base and Polygon, according to the report. The stolen tokens were consolidated into a single wallet, 0x506D19...AE03207, and then exchanged through Balancer’s vault contracts.

The repercussions of the attack were not limited to Balancer; its forked counterpart, Beets on the network, also reported financial losses. Experts believe the exploit targeted a common flaw in the codebases of liquidity infrastructure. Following the breach, Balancer’s governance token, , fell by more than 8% within the day as investors responded, as noted in a .

The Balancer breach highlights the broader vulnerability within DeFi’s interconnected platforms. Another crisis unfolded when Elixir, a synthetic dollar protocol, decided to discontinue its deUSD stablecoin after its main borrower, Stream Finance, went under. Stream’s external asset manager disclosed a $93 million deficit, causing its

token to crash below $0.20. Elixir suspended redemptions for 80% of deUSD holders and intends to allow the rest to redeem their balances 1:1 for through a claims portal.

These developments are reminiscent of the 2022 failures of Terra’s UST and Iron Finance, where excessive leverage and unclear collateralization worsened the fallout. Elixir stated that deUSD obligations are still fully collateralized but emphasized the importance of unwinding lending arrangements with Stream.

While security breaches dominate the news, governance issues add further complexity to DeFi’s progress.

, a blockchain with 1.3 million users actively staking, has struggled to convert this participation into DeFi growth. Founder Charles Hoskinson attributes Cardano’s relatively low total value locked (TVL) of $271 million to problems with coordination and accountability, not technology, according to a . Despite robust development, Cardano’s TVL is dwarfed by Ethereum’s $85.5 billion and Solana’s $11.29 billion.

Hoskinson has suggested that bringing in

liquidity and enabling real-world lending through initiatives like Midnight and RealFi could help resolve the persistent cycle of low liquidity and engagement. However, ADA’s weak technical signals, including trading below major moving averages, indicate doubts about the short-term effectiveness of these plans.

The recent wave of attacks has led to stronger demands for enhanced security reviews and better governance structures. Balancer’s team has advised users to revoke protocol permissions and keep an eye on wallet activity, while Elixir has prioritized protecting creditors over immediate market actions. At the same time, projects are focusing on thorough audits and testnet launches to foster confidence, as reported in a

As DeFi’s total value locked recovers from its 2024 low, the industry’s ability to withstand future shocks will hinge on addressing both technical flaws and governance shortcomings. For now, caution prevails among investors, with both Balancer’s BAL token and

continuing to trade below key support thresholds.