- BitMex’s co-founder calls on the Ethereum co-founder to engage in a rollback to recover the nearly $1.4 billion stolen from Bybit.
- Polynomial.fi’s co-founder believes that a rollback could break several initiatives on the network as he claims the network is too interconnected for a clean solution.
Co-founder of BitMex Arthur Hayes has pleaded with the Ethereum co-founder Vitalik Buterin to rollback the blockchain to enable Bybit to recover the nearly $1.4 billion in Ether stolen on Friday. According to him, he is a “mega ETH holder”, and he is prepared to support the initiative even though the community voted no on immutability in 2016.
At that time, many experts highlighted that a rollback is technically possible. However, others raised concerns about how this could undermine the decentralization claims of Ethereum. Even so, the network was rolled back to reverse the $60 million theft in Ether from The DAO in 2016. This resulted in splitting the chain into two – Ethereum and Ethereum Classic.
Concerns Surrounding Rollback
In 2019, the then-Binance CEO Changpeng Zhao and his team pushed for a rollback on the Bitcoin network to recover $40 million of assets stolen by hackers. However, this proposal was strongly opposed as it was said to go against the principle of decentralization and immutability.
Technically, the rollback process involves reversing the blockchain to its original state before the occurrence of the attack. However, it involves consensus from the market participants. Immutability, on the other hand, exists as a security feature that prevents the modification of data after it is added to the blockchain.
Commenting on the Hayes proposal, Gautham Santhosh, co-founder of Polynomial.fi, highlighted that embarking on an Ethereum rollback could rather disrupt the network. According to him, the situation in 2016 was different as the DAO hack had a clean recovery path. Today, the rollback may break bridges, stablecoins, Real World Assets (RWA), Layer 2s, etc. Basically, he believes that the network is too interconnected for a clean solution.
Meanwhile, Sina 21st Capital believes that Ethereum is currently trapped in this decision.
“Ethereum is toast. They can roll back the chain and destroy what is left of the decentralization claim or allow North Korean baad actors to keep $1.4B of ETH and unleash an eternal internal battle. Either way, it is terrible.”
How Bybit Lost $1.4 Billion to Hackers
According to the report first shared by on-chain analyst ZachXBT, Bybit was embarking on one of their routine transfers on Friday between digital wallets. However, the hackers manipulated the system to transfer Ether to an unidentified address. Specifically, the attacker quickly swapped mETH and stETH for Ether via a decentralized exchange, as mentioned in our previous news brief.
Based on the report by Santhosh, 10,000 ETH was split into 39 different addresses. Additionally, another 10,000 ETH was split into nine addresses. Later, Bybit CEO Ben Zhou briefed the community on what actually happened.
“(The hacker) took control of the specific ETH cold wallet and transferred all the ETH in the cold wallet to this unidentified address. (The exchange) is solvent even if this hack loss is not recovered.”
