Hard Fork to Release Locked Ether: Parity Technologies

Ethereum has been facing a lot of issues in its market values during these days that a multi-signature wallet bug that froze hundreds of millions of dollars’ worth of Ether. Parity Technologies has noted recently in a blog about the suggestions of a course of actions to rescue the funds.


The blog noted that from the very beginning itself that the users of the Ethereum had been facing with a command line interface with little tolerance for errors, sending thousands of Ether to 0x0. The transactions with an improperly formed “to” address were read as a delivery to 0x0.

After a few months, a bug was founded in a JavaScript utility library where the Ethereum Foundation wrote and which was used by some parties to generate wallets. This trouble 128 accounts produced by some teams and rendered useless which paved the way for the thousands of additional Ethers to get stuck.

It was DAO hack and the subsequent fork that made the problems with the transactions which replayed across Ethereum and the Ethereum Classic network. These issues were not widely recognised to foresee that Ethereum Classic would lead to several problems. It was expected that it would survive. Such as Ether deposits to contracts that were never deployed, to begin with, the Ethereum network.

Ether Frozen

The  Parity multi-signature wallet has faced an incident recently which was the deal holding the code governing the wallets’ behaviour was deleted. The users who were with Ether tokens in Parity multi-signature wallets was unable to withdraw them.

The blog noted that it is not able to recover all of the funds without a change to blockchain’s state, consensus rules modification or opcode upgrades. It can be assumable for the people that this was not the aim or intention of the developers and users who deployed the contracts or sent the transactions.

Not only this but also there have been other issues. To make an error in the address is not a significant matter. It is quite easy to happen a mistake in the address and to send the Ether to the wrong address. Sad to say that, such errors can never be proven to be non-recoverable like the addresses where the Ethers sit and are valid and usable.

Numerous Factors Involved

To unlock the stuck funds, should make a rescue operation which is only possible with a hard fork. The protocol in some cases was not right. Some other factors caused this problem now such as client usability issues and issues with codebase maintained by both private parties and the Foundation code, the unanticipated appearance of a competitor network and simple user error.

The blog stated one more thing that, Ethereum remains stable and continues to evolve.

Due to these problems and other issues, numerous groups have been lost millions of dollars. Most of it may not be recoverable just because of not being able to prove its status as lost or because of a lack of clarity in the sender’s intention.

Solutions Are Possible

Much of it can be recovered.

A hard fork is debatable. It shows a change to how we had expected the network to act. The question is that whether there could happen any adverse effects due to these changes in the network’s expected behaviour when some users based their off- and on-chain behaviour assuming behaviour would not change. There is correspondence to the earlier debate over changing the rate of issuance and its impact on miner behaviour and incentives.

The problem of having such various roots have to be expected, and many solutions have been brought ranging from partial coverage with strict rules on a few cases to solutions focusing on edge cases without strict definitions.

A discussion was put forth by Vitalik in  EIP 156 which enables the private key holders who were impacted by specific issues, to withdraw their Ether. The issues covered by this proposal include contracts created without code, losses generated by the JavaScript library bug and damages on account of replay attacks.

This marks a partial coverage with a strict rules solution. Such cases will have a perfect possesser on the chain which can be recognised easily without much cost for the computation. Therefore, this proposal does not give any approval to any particular account, application or user. That kind of approach fails to cover the funds locked in the Parity multi-signature wallets since the contract itself has a code, and it would not permit recovery of tokens besides Ether.

Another solution to this problem is that to address specific Ether and tokens recovery which is a solution addressing capturing as many edge cases as possible. But it is not tightly defined. The answer would need those that “hold the pen” to determine its scope.  It is the most direct solution and would not change the semantic behaviour of the EVM. But it can address all the cases raise recently.

Change The Protocol

A change in the protocol is the third solution that put forth by Parity which is that would permit the recovery of suicided contracts and deployment of contracts for all users going forward. This would renew the Parity multi-signature wallets and other problems in which contract addresses bear funds but have not had code employed to them. Such a solution would also protect from similar incidents that may occur in future.

The partial coverage with a strict approach represents enough change in the behaviour of the EVM which can be calculated as a functional change to the platform as much as it will no longer make transaction ordering the key factor in a contact address. Parity recommends this solution since it adds functionality for users through the details being debated.

Attaining the proper governance around protocol upgrades and hard forks on Ethereum has been in progress. Concurrence has been achieved on technical upgrades while non-enhancement hard forks have been a failure. The next discussion will be a critical test for how contention can transform into consensus.

Parity is the hope that the community will help and support them to rescue the funds for the users as much as possible.

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