The Zano network, a privacy-oriented layer-1 blockchain, has executed a major network reset following the discovery of a security vulnerability in its Gateway Addresses feature. The restoration eliminated approximately 30 days of blockchain data, rolling back network operations to block 3,833,000.
The Gateway Addresses functionality, deployed as part of Hard Fork 6 in August, was designed to streamline integration for cryptocurrency exchanges, cross-chain bridges, and payment processors by providing an account-based balance model. However, the system contained an exploitable weakness that enabled the unrestricted generation of both ZANO and Freedom Dollar tokens, undermining the blockchain's fixed token supply principle.
Network Restoration and Technical Details
The development team confirmed that wallet security credentials and transaction confidentiality features remained intact during the incident. At least two Gateway Addresses were created within the feature's initial seven days of operation, each requiring a 100 ZANO registration fee.
Network restoration required mining operations, staking participants, node operators, trading platforms, and service providers to deploy updated software and synchronize with the recovered blockchain. Version 2.2.3.600 was released to facilitate the transition. Standard wallet users can upgrade without re-entering recovery seed phrases.
Exchange MEXC temporarily disabled deposit and withdrawal functions for ZANO and FUSD tokens during the migration, with no specific timeline provided for service restoration at the time of reporting.
Limitations and Compensation
All transactions executed during the affected timeframe were removed from the restored blockchain. However, the rollback cannot reverse transactions already finalized on external blockchain networks, meaning assets converted to USDT, DAI, or other tokens on separate platforms remain beyond recovery.
The project is collaborating with impacted parties to quantify damages. Reimbursement funding will be sourced from the development treasury, team-controlled assets, and contributions from major token holders, with no additional ZANO tokens to be minted to address losses.
Zano's head of marketing and growth noted that the development team lacks authority to unilaterally enforce a rollback and can only distribute software updates and request voluntary adoption from network participants. Major mining pool operators hold significant influence in such decisions.
Market and Future Outlook
ZANO declined approximately 12.85% over a 24-hour period during the recovery operation, trading around $6.32 with a total market capitalization near $97.6 million.
The development team announced plans to release a detailed technical document examining the exploit's cause and providing a comprehensive audit of associated code. The Gateway Addresses feature will remain disabled pending completion of the security review process, with no target date established for reactivation.
