After the hack that shook the cryptocurrency community with $320 million, the Liquid network has returned to operating almost normally. However, one of its main functions—converting LBTC back into bitcoin via "peg-out" operations—remains suspended.
The good news is that block production and routine transactions have been running normally since September 10, giving users a second chance to transfer LBTC across the network. As the gradual recovery process continues, users can now use platforms, wallets, and other ecosystem services related to Liquid, though caution still remains, as the full Bitcoin associated with the incident has not yet been restored.
### Services resumed after the recovery process
According to the update on September 17, several services resumed operation within the Liquid ecosystem. For example, the Mifiel platform resumed the issuance and processing of digital authorization warrants, while confirming their payments in a normal manner.
In addition, the Aqua platform has regained asset transfer operations on Liquid and "peg-in" operations. Also, Aqua’s new "Indra swap" feature allows users to swap between LBTC and Bitcoin over the Lightning Network, although liquidity is still limited for now.
This platform, along with other wallet providers, has also started gradually returning, but the services tied to LBTC that ultimately require a "peg-out" process are still restricted—which makes sense because those routes ultimately require users to move Bitcoin off the Liquid network.
### Bitcoin recovery is slow but not weak
In short, everything depends on Bitcoin’s recovery. During the September 6 incident, about 4,000 Bitcoins were withdrawn. Of that amount, around 3,400 Bitcoins were returned to the "Federation" reserve, while about 600 Bitcoins are still unrecovered.
What’s notable at this stage of the recovery is that the technical root cause of the hack has been identified: the exploitation path was dismantled, and an immediate fix was already released via the Elements v23.3.4 release—the software that Liquid runs on.
Overall, it can be said that for full recovery, Liquid will ultimately need to restore bridge functions, "peg-out" operations, and platform support so users can transfer LBTC and Bitcoin normally again.
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Quick summary:
- The hack resulted in pulling 95% of the "Federation" peg into a single transaction.
- Block and normal transaction production has been running normally since September 10.