The Liquid Network, a Bitcoin sidechain, announced that its bitcoin reserves are now fully replenished, restoring a one‑to‑one backing for its native LBTC token.
Reserve Replenishment
On November 2, the network confirmed that 250 BTC had been added, closing the remaining shortfall from the September incident. The shortfall, estimated at roughly 600 BTC (about $46 million), had persisted for almost two months. The source of the additional funds was not disclosed, and a post‑mortem report on the hack has not yet been published.
Current Backing
Data from the Liquid Network explorer shows that 4,270.54 LBTC, valued at approximately $327 million, are in circulation and are fully backed by an equal amount of bitcoin.
Background of the Hack
On September 6, an attacker exploited a vulnerability in the Elements software used by the Liquid Network, creating about 4,000 LBTC without corresponding bitcoin. The attacker returned 3,400 BTC the following day, retaining roughly 600 BTC as a bounty for identifying the bug. Those funds have not been moved since.
Response and Future Plans
Liquid Network officials indicated that they are working to modernize governance, clarify responsibilities, and add technical and operational safeguards. Further details are expected in the coming weeks.
Community Reaction
During the crisis, some users expressed concerns about fund safety and sought alternative ways to move assets. For instance, Bull Bitcoin, a Canadian exchange and wallet provider, reported that its customers could not convert LBTC back to BTC in late September. The founder of Bull Bitcoin responded to the reserve restoration with a simple “1:1.”
Network Oversight
The network is overseen by a federation of 81 members, including firms such as Hodl Hodl, Specter, Coinshares, Komainu, Xapo, Bull Bitcoin, and Ledger. The Elements software is developed by Blockstream.
