Flow Scraps Blockchain Rollback Plan After Community Backlash Over Decentralization
Following a $3.9 million exploit, Flow has abandoned its original blockchain rollback plan after ecosystem partners raised concerns that such a move would undermine decentralization and introduce operational risks.
Instead, the revised recovery strategy involves restarting the chain from the last sealed block prior to the halting of transactions on December 27, preserving legitimate history and avoiding a full chain reorganization.
This approach targets fraudulent assets through account restrictions and token destruction, although the recovery of stolen funds remains uncertain. An extraordinary governance step is needed involving a temporary software upgrade that grants service account powers beyond normal operations; this requires validator approval and the subsequent revocation of these powers after remediation.
Analyst Matthew Jessup described the new plan as sound, highlighting validator-driven compliance and maintaining the EVM chain in a read-only state during remediation.
The vulnerability exploited was in Flow’s execution layer, but it did not compromise existing user balances, with all legitimate deposits remaining intact. The FLOW token has experienced a decline of roughly 42% since the incident, according to CoinGecko data.
Recovery of stolen funds will depend on their final destination, especially if moved to centralized exchanges or off-network venues, with complexities arising from cross-jurisdictional legal challenges and potential liabilities for bridges and exchanges.
