Osmosis freezes 22.65 BTC due to Nomic forwarding vulnerability

Osmosis freezes 22.65 BTC: Nomic chain forwarding vulnerability raises cross-chain trust risks

Osmosis froze assets worth 22.65 BTC due to a forwarding vulnerability on the Nomic chain. The Osmosis team said the vulnerability affected the security of bridging Bitcoin reserves. While this incident isolated cross-chain vulnerabilities from Bitcoin's own settlement layer, it also reintroduced the "counterparty trust" risk that base layer holders strive to avoid.

Core Points

• Frozen Objects: This freeze involves Wrapped and Bridged forms of Bitcoin, rather than the native tokens of the Bitcoin network itself.
• Nature of the event: According to Osmosis's statement, the vulnerability exists in the custom forwarding mechanism of the Nomic chain, and Osmosis's own chain and the Interstellar Blockchain Communication Protocol (IBC) are not affected.
• Status of funds: A freeze is intended to lock in funds and is not the same as a confirmation of permanent losses or reserves shortages.

Detailed situation analysis

1. Frozen amount and verification status

According to a report by CryptoSlate on September 10, 2026, Osmosis moved the balance of 22.65 BTC to a locked state after discovering a Nomic chain defect. It should be noted that the asset denom (unit of pricing) of this amount has not been independently verified on the chain and should not be interpreted as a freezing of native Bitcoin at the base level. The freezing operation only places funds in a state of non-availability and does not in itself quantify the specific amount permanently lost from the support pool.

2. allBTC Basket Structure and Vulnerability Impact

Osmosis lists allBTC, an alloying asset that represents bridging the Bitcoin token basket. According to a July 2024 governance discussion record, the basket initially included WBTC, WBTC.eth.axl and nBTC. This basket design means that a single bridge failure could compromise overall support capabilities.

A vulnerability in the Nomic chain allows an attacker to double spend nBTC and send false credentials to Osmosis. The Osmosis team pointed out that although the vulnerability was located in Nomic's custom forwarding mechanism, the Osmosis and IBC protocol itself were not compromised. According to reports, among the support basket corresponding to the 110.57 allBTC in circulation, 39.84 nBTC is invalid, accounting for 36.03%. However, these data are only reported supporting exposure and are not proof of realized holder losses, and the dashboard data behind them has not been independently verified by on-chain grabbing.

3. Response Measures and Governance Authorities

In response, Nomic and allBTC inflows and outflows were frozen, while allBTC's casting and redemption functions were suspended. Planned governance actions reportedly include confiscating frozen funds and injecting capital into community pools for recovery. It should be emphasized that these measures are currently only in the "proposal" stage and have not yet been implemented.

The allBTC contract is managed by Osmosis Governance, in which the 3-of-6 moderator sub-DAO has the power to disable pools and flag asset damage. It is through this mechanism that listed assets can be suspended in the middle of an event. In contrast, Bitcoin's base layer does not have such administrative counterparty control, and holders do not have to rely on such intermediary authority.

4. Parameter Limits and Current Situation

The original launch proposal set static caps: 100% for WBTC, 50% for WBTC.eth.axl, and 5% for nBTC. But these are startup parameters and not limitations when the event occurs. Therefore, the reported 36.03% nBTC exposure cannot be interpreted as a violation of the 5% cap that remains in effect, as the evidence does not establish the current configuration status.

Outstanding issues and market background

There are still many uncertainties about the details of freezing and supporting reserves. Whether the support gap actually exists, the status of repair, the final disposal method of frozen funds, and the risk exposure of individual users are inconclusive in the available evidence. When assessing risks, readers should regard the pricing unit of frozen balances as an open issue to be confirmed on the chain.

The incident reflects broader security pressures on bitcoin-related infrastructure. From phishing activities following the breach of Trezor's mail provider to Block's institutional custody ambitions to apply to establish a Bitcoin bank, each case shows that the risks of packaging and bridging Bitcoin lie on the margins, not within the underlying protocol.

At the same time, the market performance of Bitcoin itself is relatively solid. Bitcoin traded at $78,102, with a market value of nearly $1.57 trillion, down 1.9% in 24 hours. The Market Fear and Greed Index reads 69 (Greed). While the bridging notation was suspended, the base-level settlement guaranteed by the proof of work continued to package blocks without interruption, which clearly demonstrated the real risk of custody in this incident.

Disclaimer : This article is for reference only and does not constitute financial or investment advice. There are significant risks in the cryptocurrency and digital asset markets. Before making a decision, be sure to study it yourself.