THORChain's $10.7M Exploit Recovery Vote Explained




 THORChain shut down trading on May 15 after a rogue node operator drained $10.7 million from a single Asgard vault. The attacker joined the network just two days before the exploit, spent time participating in routine signing operations, and used that access to reconstruct a full vault private key through a flaw in the GG20 threshold signature scheme.

Eight days later, the protocol is still offline. Node operators are now voting on ADR-028, a recovery proposal authored by Aaluxx Myth, a core contributor working on the network restart plan.

The proposal covers how the loss gets absorbed, how trading gets restarted, and what happens to the attacker's node. Protocol-Owned Liquidity takes the first hit and gets reduced to zero. Whatever POL cannot cover gets distributed across synth holders by trimming synth supply. Regular RUNE holders are not affected. No new tokens are minted. No RUNE gets sold.

The attacker's node faces a 100% slash. Innocent nodes that were assigned to the same compromised vault through normal rotation are protected. Any recovered assets get paired with slashed RUNE, and surplus RUNE gets burned.

THORChain is offering the attacker a 10% bounty to return 90% of the stolen funds. The community has already started questioning whether that offer carries any weight, given that no on-chain enforcement mechanism backs it. One community member, ThinkWhysly, suggested the bounty section should be handled off-protocol through law enforcement rather than included in a binding governance document.

The protocol also confirmed it will not censor the attacker's swaps once trading resumes. That is consistent with THORChain's permissionless design but means there is no on-chain pressure attached to the bounty offer.

Trading resumes only after patch v3.19 deploys and a successful churn happens. Version 3.18.1 is already live and secured the remaining four vaults.

For the full breakdown of the ADR-028 mechanics, the governance vote structure, and what it means for synth holders and RUNE positions, the complete analysis is at CryptoNewsLive.org.

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