Parity Proposes Hard Fork To Unfreeze Funds

December 11, 2017 8:03 PM

The Parity team has put out a press release suggesting several schemes by which a hard fork could be used to restore access to the Ether frozen in its multisig wallets.

On December 11, the blockchain software firm Parity issued a statement suggesting several methods by which the funds currently frozen in its multi-signature hardware wallets could be unlocked, all of which involve hard forks. The company acknowledged that Ethereum’s protocol was not “specifically at fault” in relation to the bug that allowed a user to suicide the library contract, making more than 500,000 Ether in wallets that relied on that contract unavailable. Parity therefore admits that “No one should be under any illusion that unlocking these stuck funds would be anything other than a rescue operation,” but continues to hope that “the community would get behind a rescue of these funds to help all the users that we can.” The firm had previously confessed it could have prevented the freeze if its personnel, who were aware of the bug in the in the library contract, had realized the seriousness of the vulnerability.

The first method surveyed in the statement is the Ethereum Improvement Proposal known as EIP156. The proposal was originally pitched by Ethereum founder Vitalik Buterin and was suggested as a potential solution to Parity’s current woes by Martin Swende, the head of security for the Ethereum Foundation. According to the company, this fix would not “cover the funds locked in the Parity multi-signature wallets.”

The document’s authors also discuss the possibility of an “‘address specific’ Ether and Tokens recovery.” They claim to “understand the debate that may ensue from such a strategy” considering that it “would require those that ‘hold the pen’ to define its scope.” In other words, such a solution would abandon any pretense of improving the functionality of the Ethereum ecosystem as a whole and would simply address the problem of particular funds being inaccessible. The “debate” that might surround this approach presumably has to do with the overlap between the company’s leadership and the inner circle of Ethereum developers, making the fix appear motivated by a concern for the well being of insider projects and out of keeping with the blockchain space’s decentralized ethos.

The solution that the firm favors involves changes “to the Protocol which would allow the revival of suicided contracts and fine-grained deployment of contracts for all users going forward.” This approach would unfreeze the funds locked in Parity wallets and “safeguard future incidents of a similar nature.” Four versions of this fix are currently under consideration, and the company asserts that any of them would represent “enough of a change in behaviour of the [Ethereum Virtual Machine] that it could be considered a functional enhancement to the platform” rather than a pure rescue operation with no benefit to users unaffected by the freeze.

The Parity team purports to recognize that “any hard fork is contentious” in light of the fact that “some users have based their on-chain and off-chain behaviour on the assumption that behaviour [of the network] would never change.” In order to advocate for such an outcome, the document attempts to frame the Parity freeze as the latest episode in a history of token-loss events that have impacted segments of the Ethereum ecosystem practically since its inception.

Shortly after the blockchain came into being, the announcement relates, “the first users of Ethereum had to grapple with a command line interface that was extremely unforgiving of mistakes” and “saw thousands of Ether sent to address 0x0.” Not long after, a bug “in a library of Javascript utilities written by the [Ethereum] Foundation … resulted in approximately 1 in 128 [wallets], that were produced by some teams, being rendered useless.” The statement also refers to the DAO hack and claims that the continued popularity of the Ethereum Classic blockchain, which followed the ensuing hard fork, caused problems that included “deposits of Ether to contracts that were never deployed on the Ethereum network in the first place.” The next event in this sequence of costly mishaps, according to the statement, was the Parity freeze. In the words of the document’s authors, “Issues with client usability, problems with codebase maintained by both private entities and the Foundation code, the unexpected emergence of a competitor network, and plain user error have contributed to where we are today.”

For his part, Nick Johnson, the chief software architect of the Ethereum Name Service, warned that the proposed changes threaten to impact invariants, which are conditions in a software environment that one can reliably assume to be true within a given set of parameters. “Breaking or changing invariants,” he explained, “isn’t always a bad thing, but it always needs to be approached with great caution. A one-off change to an invariant … is a lot easier to evaluate than an ongoing change.” Understanding all the possible implications of the ongoing changes that Parity has proposed “would be very difficult, given the number of existing contracts that contain [the suicide command], and the fact that many of them will have no published source code.” Therefore, Johnson declined to endorse any of the four variations of the fix promoted by Parity, saying, “I’m skeptical there is any variant of this proposal that would sufficiently alleviate the risks involved to be worthwhile.”

The question that Parity’s leadership are doubtless asking themselves now: will miners be convinced enough by this narrative to support a hard fork? ETHNews has not received indication that any of the above-mentioned plans will come to fruition, but will continue to cover this story as it develops.


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