A double-spend vulnerability involving Nomic’s nBTC has created a backing problem for Osmosis’s Alloyed BTC product.
Public reporting based on Osmosis disclosures says approximately 39.84 nBTC connected to the exploit entered Alloyed BTC.
That represented roughly 36% of Alloyed BTC’s backing.
What happened
Nomic is a Bitcoin bridge network used to move BTC into the Cosmos ecosystem.
The incident reportedly involved a flaw in Nomic’s native transfer or forwarding mechanism that allowed invalid nBTC value to enter the system.
Why Alloyed BTC was affected
Alloyed BTC combines multiple Bitcoin representations into a pooled asset.
Failure of one underlying representation can therefore contaminate the pooled backing.
Emergency restrictions
Osmosis reportedly paused Nomic-related deposits, Alloyed BTC deposits/withdrawals, minting and redemptions.
22.65 BTC frozen
An emergency validator upgrade reportedly froze 22.65 BTC in an attacker-linked address.
That improves recovery prospects but does not automatically restore 1:1 backing.
Governance recovery proposal
Osmosis indicated governance may be asked to authorize use of the frozen BTC and possibly BTC from the community pool to restore the remaining shortfall.
Osmosis and IBC boundary
Osmosis said the vulnerability originated in Nomic’s native transfer mechanism and that Osmosis itself and IBC were not compromised.
Evidence Status
Confirmed / Protocol-reported through Media
- 39.84 nBTC implicated.
- About 36% of Alloyed BTC backing affected.
- 22.65 BTC frozen.
- Mint/redemption and relevant deposits/withdrawals paused.
- Vulnerability attributed to Nomic.
Developing
- Final root cause.
- Governance vote.
- Community-pool usage.
- Full backing restoration.
- User redemption timing.
Risk Assessment
Critical.
What to Watch Next
Governance proposal, validator action, frozen BTC disposition, restored collateral ratio, redemption reopening and Nomic post-mortem.
FAQ
How much nBTC was implicated?
Approximately 39.84 nBTC.
How much of Alloyed BTC backing did that represent?
About 36%.
How much BTC was frozen?
Approximately 22.65 BTC.
Was Osmosis itself hacked?
Osmosis says the vulnerability originated in Nomic.
Is Alloyed BTC fully restored?
Not yet in the reviewed reporting.
Could the community pool be used?
Osmosis indicated governance may consider it.