Bybit Hacked for 500,000 ETH, Sparking Community Debate on Ethereum Rollback. Core Developer Tim Beiko Emphasizes This Incident Differs from The DAO, as Hacker Funds Were Quickly Transferred, and a Rollback May Lead to Unmanageable Chain Reactions. Yuga Labs Vice President 0xQuit Warns that the Impact of a Rollback Could Exceed $1.5 Billion.
(Background Summary: Fake! Vitalik Initiates Vote to Rollback Ethereum to Save Bybit from Hack, Not Real News)
(Background Supplement: The Largest Heist in Crypto History: Why Bybit Exchange Lost $1.47 Billion, Who the Culprit Is, and What Risks Users Face with Withdrawals?)
On the 21st, after Bybit was hacked by North Korean hackers Lazarus, resulting in the theft of approximately 500,000 ETH (valued at $1.46 billion), the community ignited a heated discussion about whether Ethereum’s blockchain should be rolled back (to a certain block) to freeze the stolen funds.
Arthur Hayes Supports Rollback
Yesterday, BitMex co-founder Arthur Hayes tweeted: Why not rollback Ethereum to help Bybit? Following the 2016 The DAO incident, the Ethereum community has already abandoned the network’s “immutability”; why not do it again? He stated:
If the community wants to do it again (rollback on-chain transactions), I would support it.
No one has an opinion on DeFi on CZ’s computer (referring to the $BNB ecosystem), so why not let $ETH become Vitalik’s computer?
Additionally, there are even rumors that the Ethereum Foundation is about to vote on whether to rollback, but this news has been denied.
Extended Reading: Fake! Vitalik Initiates Vote to Rollback Ethereum to Save Bybit from Hack, Not Real News
.@VitalikButerin will you advocate to roll back the chain to help @Bybit_Official?
— Arthur Hayes (@CryptoHayes) February 21, 2025
Core Developer Warns: Rolling Back Ethereum is Unrealistic and May Cause Unresolvable Chain Reactions
However, Ethereum core developer Tim Beiko presented four detailed points explaining why a rollback of Ethereum due to Bybit’s hack is not feasible:
1) No Violation of Ethereum Protocol
Bybit was hacked due to the compromise of a multi-signature management interface, leading to erroneous transaction approvals, which is different from the smart contract vulnerability seen in The DAO. From the perspective of the Ethereum protocol, these transactions are completely legitimate, making it impossible to distinguish between hacked and normal transactions.
2) Hacker Immediately Transfers Funds, Making Freezing Impossible
In The DAO incident, funds were frozen for a month, but the assets stolen from Bybit were immediately in circulation on-chain. The hacker utilized DeFi protocols, DEXs, and cross-chain bridges to quickly obfuscate the source of the funds, making any attempts to “rollback” extremely difficult.
3) Chain Reaction from Rollback Could Be Massive
Ethereum is deeply integrated with exchanges, DeFi, and RWA (Real World Assets). Any “rollback” could affect already settled transactions of other applications (e.g., exchange sales, RWA redemptions), with impacts far exceeding those of The DAO incident, potentially causing nearly unresolvable chain reactions.
4) Past Attempts at “Rollback” Met with Strong Community Opposition
In 2018, EIP-999 proposed to roll back 500,000 ETH frozen due to a Parity Wallet error, but it faced strong opposition from the community and was ultimately not passed. This reflects a shift in community stance toward conservatism regarding “changing blockchain history”; even if technically feasible, there is a reluctance to make changes. Tim Beiko emphasized that past rollbacks of Bitcoin and Ethereum were conducted under special circumstances, and the current level of application integration in Ethereum and the community’s pursuit of immutability render a “rollback” impractical.
ELI5 why we cannot “rollback” Ethereum?
After yesterday’s Bybit hack, crypto commentators are again asking why Ethereum cannot “rollback” the chain to reverse the hack. While experienced ecosystem actors near-unanimously agree that this is infeasible, it’s worth breaking down…
— timbeiko.eth (@TimBeiko) February 22, 2025
Yuga Labs Vice President: Rollback Cost Far Exceeds $1.5 Billion
Yuga Labs Blockchain Vice President 0xQuit also shares the same stance, stating that the implications of a rollback would far exceed the $1.5 billion lost in the Bybit hack:
Ethereum could indeed rollback (Bitcoin could too, all it takes is majority consensus).
But the impact of doing so would be larger than $1.5 billion. Thousands of innocent users would lose funds, while thousands more would gain money that does not belong to them. If major players like Circle and Tether are considered, these institutions could collapse. The chain reaction from a rollback is unpredictable, as Ethereum today is no longer a simple network with basic smart contracts and “Hello World” applications like it was back in the DAO era.
He emphasized,
Ethereum is now the core of DeFi and serves as the settlement layer for numerous rollups; such infrastructure cannot simply be “rewound.”
Ethereum could rollback, yes (so could bitcoin btw, all you need is majority consensus).
The impact of doing so would be larger than $1.5B. Thousands of innocent people would lose money, thousands more would gain money they shouldn’t. Accounting for all major players like Circle…
— Quit (@0xQuit) February 22, 2025
Bybit CEO: Community Should Decide via Vote
Additionally, in a Spaces AMA, when Bybit CEO Ben Zhou was asked whether he supported rolling back the Ethereum blockchain to invalidate the funds stolen by the Lazarus Group, he responded:
This may not be something that one person can decide alone. According to the spirit of blockchain, it might be best left to the community to vote on, but I’m not sure.
The DAO Incident Review
The DAO incident is one of the largest hacks in Ethereum’s history, and it was the first event that led to a community split. The DAO was a decentralized investment fund based on smart contracts that raised approximately $150 million in ETH (which then accounted for 15% of the total ETH supply). However, it was hacked due to a “Reentrancy Bug,” resulting in the theft of 3.6 million ETH (approximately $60 million).
To recover the funds, the Ethereum community ultimately chose to conduct a “hard fork” to return the stolen assets to their original holders’ accounts. However, this decision sparked controversy, with some opponents insisting on maintaining the original chain, ultimately resulting in the formation of two chains: Ethereum (ETH) and Ethereum Classic (ETC), which upheld immutability.
