Liquid Network Reboots After Massive Hack, Peg-Outs Remain Frozen
The Liquid Network has restarted its operations after being hacked for approximately $320 million. Block production resumed on September 10th, but initially, transactions were disabled to ensure stability.
Users can now transact with assets already on the network, but a key limitation remains: peg-outs are still frozen. Peg-outs allow users to move Liquid's Bitcoin-typed asset (LBTC) back to the main Bitcoin chain while receiving BTC in return.
This function has been disabled intentionally due to a proof-verification cache vulnerability that affected the underlying Elements software. Blockstream, the company behind Liquid, is taking a cautious approach to ensure the network's internal state and BTC/LBTC reserves are correctly restored and verified.