Token of Power Exploited for $1.58 Million in Governance Attack

• Token of Power lost $1.58 million after an attacker gained majority voting control and executed a malicious proposal.
• The exploiter minted 10 billion TOP tokens and swapped them for WETH, draining the Balancer liquidity pool.
• Security firms say weak governance safeguards and the lack of a timelock enabled the attack.

The Token of Power (TOP) protocol has suffered a governance takeover attack that allowed an exploiter to mint billions of TOP tokens and drain about $1.58 million worth of Ethereum from a liquidity pool.

Blockchain security firm Blockaid raised the alarm on X. The company said its exploit detection system identified a governance attack that led to the theft of 944.2 WETH, worth roughly $1.585 million, from the TOP/WETH Balancer V1 pool.

According to Blockaid, the attack did not exploit Balancer itself. Instead, the liquidity pool was used as the venue where the attacker swapped newly minted TOP tokens for WETH.

Attacker Secured Majority Control

The exploit was caused by a misconfigured Aragon DAO governance setup used by Token of Power.

Blockaid explained that TOP’s MiniMeToken had a total supply of only 16,384 TOP. The attacker accumulated 8,192 TOP tokens, giving them slightly more than 50% of the voting power to control governance.

Because the governance system lacked a timelock, the attacker was able to create, vote on, and execute a proposal within a single transaction. The malicious proposal called the TokenManager’s minting function and generated 10 billion TOP tokens directly to the attacker’s contract.

After receiving the newly minted tokens, the attacker immediately sold them into the TOP/WETH Balancer V1 pool. The swaps drained most of the pool’s WETH liquidity.

Security Firms Detail the Exploit

Blockchain security platform Cyvers also reported the incident. The firm said an address funded through Tornado Cash carried out a suspicious transaction that drained approximately $1.58 million from the TOP/WETH Balancer pool.

Security researchers at BlockSec provided additional details about the attack.

According to BlockSec, TOP’s low valuation and limited circulating supply made it relatively inexpensive for the attacker to acquire majority voting power. After gaining control, the attacker passed and executed a governance proposal that minted a massive amount of TOP. The tokens were then swapped for WETH through the Balancer pool.

BlockSec said the attacker withdrew roughly 944 WETH from the exploit. However, the attacker reportedly spent about 662 WETH beforehand to acquire enough TOP tokens to secure governance control.

As a result, the firm’s analysis estimates the net profit at around 282 WETH.

Funds Quickly Moved Through Tornado Cash

On-chain investigator 0xsadikbaba said the attacker executed more than eight Balancer swaps within a single transaction. The activity ultimately drained about 945 ETH from the liquidity pool.

The researcher added that the stolen funds were quickly routed through Tornado Cash, apparently to obscure their origin. According to the analysis, the attacker made multiple deposits, including several 100 ETH and 10 ETH transactions, within about an hour of the exploit. 

At the end of the laundering, the attacker’s wallet held almost no ETH tokens.

The incident adds to concerns about governance security in DeFi, especially among smaller projects. BlockSec stressed that projects using Aragon- or Lido-style governance frameworks should review their voting power distribution, quorum requirements, proposal thresholds, minting permissions and other governance safeguards.

The attack also highlights the importance of timelocks and similar protections. The mechanisms prevent governance proposals from being created, approved, and executed instantly.

Notably, no vulnerability was found in Balancer itself. But the incident shows how flaws in governance design can still result in major losses for liquidity providers and token holders.

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