Balancer Rounding Exploit - $128M DeFi Liquidity Drained

An attacker drained $128.64 million from Balancer V2 ComposableStablePool contracts across six blockchain networks in under 30 minutes by exploiting arithmetic precision loss in pool invariant calculations. Check Point Research describes how the adversary weaponized the _upscaleArray function and FixedPoint.mulDown rounding behavior—when token balances are pushed to the 8-9 wei range, Solidity's integer division causes up to 10% precision loss per operation. The attack occurred entirely during smart contract constructor deployment, executing 65+ micro-swaps that compounded precision errors. What's clever: the attacker used a sophisticated three-phase swap sequence within single batchSwap transactions. Phase 1: swap large amounts of BPT for underlying tokens to push one token's balance to the critical 8-9 wei threshold where rounding errors maximize. Phase 2: execute small swaps involving the boundary-positioned token—the _upscaleArray function rounds down during scaling, causing the invariant D to be underestimated and BPT price to drop artificially. Phase 3: mint or purchase BPT at the suppressed price, then immediately redeem for underlying assets at full value. The exploit contract accumulated stolen funds—4,623 WETH, 6,851 osETH, and 4,259 wstETH—via Balancer's Internal Balance mechanism during deployment, then withdrew them to an externally owned wallet in subsequent transactions. Event logs show thousands of WETH and synthetic ETH tokens reassigned via InternalBalanceChanged events. The attack demonstrates how negligible rounding errors become exploitable when amplified through dozens of operations in atomic transactions.