Osmosis Froze 22.65 BTC After the Nomic Exploit

• Osmosis halted operations involving Alloyed BTC following the Nomic exploit.
• About 36% of Alloyed BTC’s backing was put at risk.

A vulnerability was discovered on the Nomic network that allowed a hacker to use the same nBTC tokens twice (double-spend) and send fake vouchers to the Osmosis exchange.

As a result, Alloyed BTC’s backing was put at risk. The attacker injected 39.84 nBTC into the system, accounting for about 36% of the token’s total reserves, leaving it partially undercollateralized.

Osmosis stressed that the decentralized exchange itself and the IBC protocol were not hacked. The vulnerability was in a custom transaction-forwarding mechanism on the Nomic side.

After the issue was identified, inbound and outbound transactions for Nomic and Alloyed BTC on Osmosis were frozen. Together with validators, the team also carried out an emergency upgrade that made it possible to freeze 22.65 BTC at the attacker’s address.

Osmosis plans to put a proposal to the community to vote on confiscating the frozen assets. In addition, the team will ask governance to use accumulated bitcoin from the community pool to cover the remaining shortfall and fully restore Alloyed BTC’s backing.

As a reminder, earlier about 4,000 BTC worth $320 million was withdrawn from the Liquid Network due to a likely error in Elements. However, later the alleged “ethical hackers” returned 3,400 BTC to the Liquid Network.

Сообщение Osmosis Froze 22.65 BTC After the Nomic Exploit появились сначала на INCRYPTED.