Reward: 800 Renown, 6200 Gold.
The village of Knothole Glade is closed from everyone because of a threat of a monster know as the White Balverine. Go to the Guild and take the corresponding Quest Card. When you return to the city gates, you'll have to defend some peasants from 3 or 4 Balverines. Then you'll be finally able to enter the town and will encounter the White Balverine for the first time.
Hit this beast 10 times. You can't hurt it, but it'll retreat. Knothole Glade Chief will tell you about a hunter who once lived in this town and who knew how to kill it. His wife lives in a house in south-eastern part of the area. Once you're there, the Balverine will attack again. Hold him off one more time and the widow will tell you what's going on (the White Balverine is her husband) and give you a Silver Augumentation, which will enable you to harm the beast once you put it into one of your weapons. Do this and go to Witchwood Lake to face the monster one last time.
White Balverine will call some reinforcements (regular Balverines) a few times during the fight, but try to focus your blows on him. He won't last long and you'll return to Knothole Glade as a Balverine slayer.