-
Osmosis said its Alloyed BTC token is fully backed by real Bitcoin again, up from 63.97%, after a recovery approved by governance was completed on Wednesday.
-
A network upgrade moved 22.65 Alloyed BTC frozen at an exploiter’s address to the Osmosis Liquidity SubDAO, which used it with 17.19 BTC of community pool funds to remove 39.84 counterfeit nBTC.
-
The counterfeit nBTC was minted through the Nomic bridge on June 25 with no Bitcoin behind it, according to the original proposal.
The recovery means holders of the wrapped Bitcoin token do not bear the shortfall left by unbacked tokens minted through a third-party bridge.
On Wednesday, the Liquidity SubDAO withdrew all 39.84 nBTC from the pool, using the seized BTC together with 17.19 BTC from community pool funds, the update said. The counterfeit nBTC was then removed from the alloy entirely.
Alloyed BTC is now backed by WBTC, cbBTC, WBTC.eth.axl and WBTC.eth.atom, the update said. The withdrawn nBTC will be burned in a separate SubDAO proposal.
Validators froze 22.65 Alloyed BTC that the attacker had not moved or sold with an emergency upgrade the same day. The remaining roughly 18 BTC was extracted from Osmosis and laundered through Tornado Cash, the proposal said.
Seizing the frozen funds “reassigns a user’s balance by state change,” the proposal said, calling it a major decision and saying the forensic record shows the funds were obtained by exploiting a bridge accounting failure.
About 0.80 nBTC held outside the pool remains Nomic’s liability, the update said. Bitcoin deposits and withdrawals on the Osmosis app will reopen shortly.
This article contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). The Third-Party Sites are not under the control of CoinMarketCap, and CoinMarketCap is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. CoinMarketCap is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by CoinMarketCap of the site or any association with its operators. This article is intended to be used and must be used for informational purposes only. It is important to do your own research and analysis before making any material decisions related to any of the products or services described. This article is not intended as, and shall not be construed as, financial advice. The views and opinions expressed in this article are the author’s [company’s] own and do not necessarily reflect those of CoinMarketCap.