$260 Million: Parity Proposes EIP 999 to Recover Frozen Multi-Sig Funds

A developer with Parity Technologies has published an Ethereum Improvement Proposal (EIP), EIP 999, that seeks to un-freeze the hundreds of millions of dollars worth of ether currently stuck in multi-sig contracts.

EIP 999, drafted by Parity’s Afri Schoedon, proposes that the contract code of Parity’s now-frozen wallet library contract should be patched so that funds stored in affected wallets can be reclaimed by their owners.

Funds in Parity-based multi-sig wallets have been frozen since last November when pseudonymous Github user “devops199” reported that he or she had accidentally exploited a bug in Parity’s multi-sig wallet library contract.

Devops199 inadvertently caused the contract self-destruct, ultimately freezing funds stored in every multi-sig wallet that interfaced with the Parity library contract.

Approximately 513,000 ETH, stored across 584 different wallets, were permanently locked up as a result of the bug. Those funds were worth approximately $150 million at the time; today, they are worth closer to $260 million, and that figure doesn’t include the value of ERC20 tokens that are also be stored in the wallets.

From the proposal:

“This proposal is necessary because the Ethereum protocol does not allow the restoration of self-destructed contracts and there is no other simple way to enable the affected users and companies regaining access to their tokens and Ether. In opposite to previously discussed proposals, this will not change any EVM semantics and tries to achieve the goal of unfreezing the funds by a single state transition as specified in the next section.”

Since the Ethereum protocol does not currently allow the restoration of self-destructed contracts, the proposal would need to be activated through a hard fork. Schoedon suggested that it should be included in the list of EIPs implemented in Constantinople, Ethereum’s next planned hard fork.

However, despite precedent in the form of the DAO hard fork, previous proposals to recover the locked Parity funds have been met with resistance by the Ethereum community.

Featured Image from Pixabay

David Murray

David has been following the development of cryptocurrency technology for several years, and he is optimistic about its potential to democratize the financial system.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.