Liquid Network has resumed producing blocks following a $320 million exploit that forced the Bitcoin sidechain to halt operations, though key functions remain offline as its recovery process continues.
Network Restart Underway
The Liquid Network restarted block production after developers rolled out emergency software updates designed to address the vulnerability behind the incident. While the resumption of blocks marks an important step toward normal operations, the network is not yet fully functional.
Transactions and peg operations — the mechanism that allows users to move assets between the Bitcoin mainchain and Liquid — remain suspended. Operators indicated these features will stay paused until they are confident the network can safely handle activity again.
Producing blocks is only the first step; the network won't be whole until transactions and peg operations return.
Exploit and Recovery
The exploit resulted in losses estimated at roughly $320 million, prompting an immediate suspension of Liquid's activity to prevent further damage. The decision to halt the sidechain gave developers time to investigate the breach and deploy fixes.
Recovery efforts are ongoing, with the team taking a cautious, phased approach to bringing services back online. Restoring block production before reactivating transactions and peg functions allows operators to verify the stability of the patched software.
Liquid, a federated sidechain built on Bitcoin, is used for faster settlement, confidential transactions, and asset issuance. Incidents of this scale draw heightened scrutiny to the security assumptions underpinning such networks.
- Block production has resumed after emergency updates.
- Transactions and peg operations remain suspended.
- Estimated losses from the exploit reached about $320 million.
Users and stakeholders are being advised to await further guidance before expecting a full return to service, as the network prioritizes security over speed in its recovery.