Nomic Bug Creates Unbacked nBTC, Impacting Alloyed BTC’s Backing
- A bug in Nomic’s system allowed the minting of unbacked nBTC, creating a total of 39.84 nBTC.
- The issue resulted in a ~36% reduction in backing for Osmosis’s Alloyed BTC basket.
- Osmosis locked down deposits and withdrawals and froze funds, securing approximately 22.65 BTC from the attacker’s wallet.
- Governance is being consulted to use community pool resources to restore full backing of Alloyed BTC.
- Independent researcher Rarma identified that the bug duplicated bitcoin deposits due to an unchecked process in Nomic’s code.
The Nomic bug, unnoticed for over two months, led to significant unbacked nBTC minting affecting Osmosis’s Alloyed BTC basket by reducing its backing by about one-third. Osmosis has taken steps to secure the affected funds and is seeking governance approval to address the deficit using community resources.
This incident underscores the importance of robust code verification processes, especially when dealing with assets like Bitcoin tokens on alternative chains . (Source)
