Osmosis Freezes BTC After Nomic Network Exploit
- Osmosis halted transactions involving Nomic and Alloyed BTC after a network exploit.
- The attacker injected 39.84 nBTC, risking about 36% of Alloyed BTC’s reserves.
- An emergency upgrade allowed Osmosis to freeze 22.65 BTC at the attacker’s address.
- The vulnerability was linked to a custom transaction-forwarding mechanism on the Nomic side.
- Osmosis plans to propose confiscating the frozen assets and using community pool bitcoin to restore Alloyed BTC’s backing.
The incident highlights vulnerabilities in decentralized finance systems, as neither the Osmosis exchange nor the IBC protocol was compromised during the exploit. The emergency response included freezing significant amounts of funds to mitigate risks associated with undercollateralization.
Following the exploit, Osmosis froze over $600,000 worth of Bitcoin to secure its platform and protect users’ assets (Source).
