According to an official announcement, Notional confirmed that its V3 protocol has generated approximately 721.6 ETH of bad debt on the Ethereum mainnet and Arbitrum due to a Balancer vulnerability (641.4 ETH on the mainnet and 80.2 ETH on Arbitrum). Affected Balancer/Aura leveraged vault users will face a 100% loss; the account value of ETH lenders and liquidity providers on the mainnet and Arbitrum will be significantly reduced, including some users who used ETH as collateral for borrowing; other accounts will not be affected.

Notional stated that due to the large scale of bad debts, the V3 protocol will be gradually shut down on the Ethereum mainnet and Arbitrum, and a detailed asset withdrawal plan will be announced later. For cross-currency lending users, the platform will automatically migrate their positions to Aave to prevent liquidation risks during the shutdown process.

The official statement said the team will release a detailed report as soon as possible, explaining the reduction ratio of ETH lenders and liquidity providers, remedial measures and calculation methods, and emphasized that they are making every effort to recover assets and minimize user losses.