Ethereum core developer Tim Beiko has cautioned against any potential move to roll back the Ethereum network despite growing calls from the broader crypto community to do so in the wake of Bybit’s $1.5 billion hack. Beiko went to X to explain why reverting the chain to its pre-hack state wasn’t an option. He wrote: Experts push for Ethereum rollback to recover Bybit’s stolen funds.
The hack on Bybit happened on Feb. 21, following the transfer of funds from the exchange’s multisig wallet to a warm wallet. The transaction did look legitimate, but malicious code had infected the smart contract logic, allowing hackers—thought to be the North Korean Lazarus Group—to drain funds away. Some industry experts have proposed rolling back Ethereum, with BitMEX co-founder Arthur Hayes and Jan3 CEO Samson Mow both publicly backing the idea of rolling the token back to recover the stolen funds and prevent the North Korean government from spending them. But a rollback like that, Beiko explains, is nothing like Ethereum’s controversial hard fork in 2016 after the TheDAO hack.
Hackers took advantage of a vulnerability in TheDAO incident to drain about 15% of all ETH at the time. There was a failsafe whereby withdrawals were delayed for a month, giving developers a chance to intervene. In the end, the community voted in favor of an “irregular state change,” reversing the hack and resulting in the split between Ethereum and Ethereum Classic. See also Allegedly, the Bridgewater hedge fund holds a $3.1B Ethereum (ETH) short position. Beiko elaborated, saying that the same delay did not exist in the Bybit hack. The funds were immediately available and rapidly distributed on-chain, rendering intervention impossible without wider disruption.
Ethereum rollback sparks warnings of catastrophic consequences. A rollback would be far more disruptive now due to the exponential growth of Ethereum’s infrastructure since 2016, Beiko emphasized, than it was when TheDAO hack happened. The emergence of decentralized finance (DeFi) applications, cross-chain bridges, and real-world asset integrations means that any nonstandard state change could trigger failure at a massive scale. Beiko warned that this level of interconnectedness means that any irregular state change, even if socially palatable, would have near-intractable ripple effects. He continued to say that a rollback would also invalidate many legitimate transactions, affecting thousands of users unrelated to the hack.
Anthony Sassano, Ethereum educator, shared a similar sentiment: “That’s not how any of this works, and not even how it worked with TheDAO hack.” Yuga Labs Blockchain VP—using the X handle 0xQuit—also criticized rollback proponents, stating that the economic dislocation caused by that action would be orders of magnitude greater than the $1.5 billion taken. “Thousands of innocent people would get money taken from them, thousands more would receive money they shouldn’t,” 0xQuit wrote. According to the VP, Ethereum has become the foundation of DeFi and the default settlement layer for many rollups, making a rollback impossible.
See also Ether exchange reserves hit 9-year low. Even Bybit CEO Ben Zhou seemed to waffle on the concept, noting that he was not sure if it was one man’s decision. He suggested that following the blockchain ethos, the decision should perhaps go to a vote to gauge community opinion, but he admitted uncertainty. Blockchain rollbacks were plausible only in Bitcoin’s early days or during the infamous TheDAO incident, but the present level of complexity in Ethereum makes them all but impossible, Beiko concluded. As a decentralized network, Ethereum makes transaction immutability a big deal—once confirmed, it cannot be undone, and reversing it would shake up the rest of the crypto system.
As Ethereum developers refuse to revert to the earlier state, the crypto industry will need to look to other means of healing, such as fortifying security measures and facilitating user awareness that will prevent future exploits of this magnitude. Cryptopolitan Academy: FREE Web3 Resume Cheat Sheet – Download Now.