Despite growing calls from the crypto industry to roll back the Ethereum network to its pre-Feb. 21 state, before the Lazarus Group’s $1.5 billion hack on crypto exchange Bybit, Ethereum core developer Tim Beiko warns against the idea. He says such a move would be complex and carry significant consequences.
“It’s worth breaking down why this reasonably sounding proposal is technically intractable for less knowledgeable observers,” Beiko said in a Feb. 22 X post.
The Bybit hack isn’t like TheDAO exploit in 2016
The Bybit hack on Feb. 21 happened after a transfer from the exchange’s multisig wallet to a warm wallet, which looked legitimate but had malicious code that altered the smart contract logic to steal funds.
“A compromised interface made it appear as though a transaction was doing one thing while it was actually doing another,” Beiko said. Crypto commentators have been advocating ever since for an Ethereum rollback to reverse the hack, invalid the transactions, and recover Bybit’s funds.
Beiko said it is not that simple. He said that unlike the 2016 exploit of TheDAO — which often causes confusion about rollbacks — there’s no clear way to reverse this case without broader implications. He explained that the transaction looked like any other and didn’t break any protocol rules that would allow a fix to recover the hacked funds.
Source: Justin Bons
TheDAO controlled about 15% of all ETH (ETH) when a hacker exploited the code to steal the funds. However, there was a built-in failsafe freezing withdrawals for a month, giving developers time to fix the bug and prevent the hacker from claiming the stolen ETH.
“Because there was no way in the application itself to do this, Ethereum protocol developers had to make the change directly in the blockchain’s history,” Beiko explained.
However, in Bybit’s case, hackers gained instant access and immediately began transferring the funds onchain.
Ethereum rollback would have “near-intractable ripple effects”
Beiko said a rollback could be far more disruptive and consequential given that Ethereum’s ecosystem has evolved significantly since 2016, with decentralized finance (DeFi) and crosschain bridges.
“This level of interconnectedness means that any irregular state change, even if socially palatable, would have near-intractable ripple effects,” he said.
Source: Peter Kris
Beiko said that a complete rollback “would be even worse.” He said it would undo all settled transactions — including exchange sales and real-world asset redemptions — without reversing the offchain side.
Ethereum educator Anthony Sassano echoed a similar sentiment among the rollback debate in the crypto industry. Sassano said, “That’s not how any of this works, and it’s not even how it worked with The DAO hack.”
Rollback cost could far exceed $1.5B
Yuga Labs Blockchain vice president, who goes by the X handle 0xQuit, said the impact of a rollback would be much “larger than $1.5B.”
“Thousands of innocent people would lose money, thousands more would gain money they shouldn’t,” Quit said in an X post. Quit added:
Ethereum is now the home of decentralized finance and the settlement layer for countless rollups. You can’t just rewind that sort of infrastructure.
Some of the industry’s most prominent figures were among those advocating for an Ethereum rollback.
Jan3 CEO Samson Mow said in a Feb. 22 X post, “I fully support rolling back Ethereum’s chain (again) so the stolen ETH is returned to Bybit and also to prevent the North Korean government from using those funds to finance their nuclear weapons program.”
BitMEX co-founder Arthur Hayes tagged Ethereum founder Vitalik Buterin in a Feb. 22 X post asking him to “advocate to roll back the chain.”
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Meanwhile, in a Feb. 22 X Spaces, Bybit CEO Ben Zhou took a more neutral stance when asked if he supported an Ethereum rollback.
“I’m not sure if it’s one man’s decision. Based on the spirit of blockchain, maybe it should be a voting process to see what the communities want, but I am not not sure,” Zhou said.
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