Calls for Ethereum Rollback Amid Bybit Hack
Arthur Hayes, the co-founder of BitMEX and a significant holder of ether (ETH), has publicly urged Ethereum’s co-founder, Vitalik Buterin, to consider a rollback of the Ethereum blockchain. This comes in response to a massive hack that targeted the cryptocurrency exchange Bybit, resulting in a staggering loss of nearly $1.4 billion in ether on Friday.
In his message on X (formerly Twitter), Hayes stated, “@VitalikButerin will you advocate to roll back the chain to help @Bybit_Official. As a mega $ETH bag holder, I believe $ETH ceased to function as money after the DAO hack hardfork in 2016. If the community is open to it again, I would support this move because we already voted against immutability back in 2016. Why not consider it once more?” As of now, Buterin has not responded to Hayes’ proposition.
The details surrounding the Bybit hack emerged on Friday when on-chain analyst ZachXBT highlighted suspicious outflows exceeding $1.4 billion from the platform. The hacker rapidly converted mETH and stETH into ether using a decentralized exchange. Following this, the attacker distributed 10,000 ETH across 39 different addresses, and another 10,000 ETH to nine additional addresses, as explained by Gautham Santhosh, co-founder of Polynomial.fi, in a post on X.
Bybit’s CEO, Ben Zhou, confirmed that the hacker had “gained control of a specific ETH cold wallet and transferred all the ETH from that wallet to an unidentified address.” Zhou assured users that the exchange remains solvent, even in light of the hack’s substantial losses.
One proposed method to counteract such hacking incidents involves rolling back the blockchain. This process entails reverting the blockchain to a prior state, effectively erasing malicious transactions associated with the hack and restoring any lost or stolen funds. However, executing a rollback necessitates consensus among the network’s participants.
Historically, a similar rollback occurred in 2016 when the Ethereum network enacted a hard fork to reverse a theft of $60 million in ether from The DAO, which represented 30% of all ETH in circulation at that time. This hard fork resulted in the bifurcation of the chain into two distinct entities—Ethereum and Ethereum Classic.
In 2019, Binance CEO Changpeng Zhao and his team contemplated proposing a rollback on the Bitcoin network following a $40 million hack. However, this idea faced significant backlash from the Bitcoin mining community, which argued that it undermined the foundational principles of decentralization and immutability inherent to blockchain technology.
Immutability serves as a vital security feature that ensures once data is added to the blockchain, it cannot be altered, fostering trust and preventing tampering. Concerns have been raised about the implications of a potential Ethereum rollback in light of recent events.
Santhosh expressed his thoughts on the matter, stating, “While I wish we could roll back the chain for the Bybit hack and I’m not opposed to the concept, the DAO hack represented 15% of ETH with a clear recovery path. Today, a rollback would disrupt bridges, stablecoins, Layer 2 solutions, real-world assets, and much more. The Ethereum ecosystem has become too interconnected for a straightforward solution like what we had in 2016.”
Sina 21st Capital provided a stark analysis of the situation, commenting, “Ethereum is stuck between a rock and a hard place. They can either roll back the chain, thereby undermining the remaining claims to decentralization, or permit malicious actors to retain $1.4 billion worth of ETH, leading to ongoing internal strife. Either scenario presents significant challenges.”
In the wake of these developments, ether has seen a nearly 3% decline over the past 24 hours, although it continues to trade within a range of $2,600 to $2,800, according to data from CoinDesk.
