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On September 5, Core DAO published its post-mortem on the reward-accounting exploit that ran from August 28 to 31. Roughly 255M CORE of rewards were issued ahead of schedule. The cap held. In Core's words, the exploit "did not create any CORE beyond the protocol's limits; the 2.1B maximum supply was never violated." What it did was accelerate rewards the emission schedule would otherwise have released later. What broke was when. That makes the damage an unusual shape. No user or staking account was drained — Core states that no user or staker funds were lost and that delegated stake was never at risk. What existed instead was surplus, sitting in balances, and it arrived through the ordinary path: the extra rewards "appeared both in attacker-controlled addresses and, unintentionally, in the reward addresses of honest validators who simply received an inflated payout they did not cause." That made the on-chain reconciliation an arithmetic problem before it was a balance-editing problem. Before any affected balance could be corrected, Core needed a rule for what that balance should have been at the upgrade block. It used two. Attacker-controlled reward pools were set to zero. For affected honest validators, it defined a fair-earnings floor — the pre-incident balance plus three rounds of that validator's own normal reward — left balances at or below it untouched, and removed only the excess above. Together the reconciliation took 186,153,491 CORE out of supply by direct state reduction. A further ~69M had been moved before the upgrade and sits outside what an on-chain reconciliation can reach; Core says it is pursuing that with law enforcement. Core says the reconciliation can be checked independently against chain state at the upgrade block, and that the reward paths were subsequently reviewed by Halborn. That part matters as much as the fix. A correction that affected users and independent observers cannot verify is only a second assertion about the balances. A supply cap is a promise about how much will ever exist. It says nothing about how much should exist yet. Restoring the second one requires knowing a number the cap never had to track. Sources: https://t.co/TMhZdwRHaQ #DeepSafe #CRVA #Web3Security

On September 5, Core DAO published its post-mortem on the reward-accounting exploit that ran from August 28 to 31. Roughly 255M CORE of rewards were issued ahead of schedule. The cap held. In Core's words, the exploit "did not create any CORE beyond the protocol's limits; the 2.1B maximum supply was never violated." What it did was accelerate rewards the emission schedule would otherwise have released later. What broke was when. That makes the damage an unusual shape. No user or staking account was drained — Core states that no user or staker funds were lost and that delegated stake was never at risk. What existed instead was surplus, sitting in balances, and it arrived through the ordinary path: the extra rewards "appeared both in attacker-controlled addresses and, unintentionally, in the reward addresses of honest validators who simply received an inflated payout they did not cause." That made the on-chain reconciliation an arithmetic problem before it was a balance-editing problem. Before any affected balance could be corrected, Core needed a rule for what that balance should have been at the upgrade block. It used two. Attacker-controlled reward pools were set to zero. For affected honest validators, it defined a fair-earnings floor — the pre-incident balance plus three rounds of that validator's own normal reward — left balances at or below it untouched, and removed only the excess above. Together the reconciliation took 186,153,491 CORE out of supply by direct state reduction. A further ~69M had been moved before the upgrade and sits outside what an on-chain reconciliation can reach; Core says it is pursuing that with law enforcement. Core says the reconciliation can be checked independently against chain state at the upgrade block, and that the reward paths were subsequently reviewed by Halborn. That part matters as much as the fix. A correction that affected users and independent observers cannot verify is only a second assertion about the balances. A supply cap is a promise about how much will ever exist. It says nothing about how much should exist yet. Restoring the second one requires knowing a number the cap never had to track. Sources: https://t.co/TMhZdwRHaQ #DeepSafe #CRVA #Web3Security