What Is Ethereum Improvement Proposal (EIP-999) For Parity Wallet Recovery

Over $260 million worth of ETH that is currently frozen in multi-sig contacts could become available if an Ethereum Improvement Proposal (EIP) 999 is executed. EIP 999 was drafted by Afri Schoedon, an employee of Parity Technologies, the company whose wallet was frozen. The EIP proposes that the contract source code should be patched so that individuals whose funds are stuck in the affected wallets can get their money back.

Bugs in the Contract

The funds were frozen back in November 2017 after a pseudonymous Github user by the name ‘devops199’ disclosed that they had compromised Parity multi-sig wallet library contract. At the time, the code had two bugs – one could instantly delete the contract using a ‘kill’ function, and the other enabled anyone to assume ownership of the entire contract. Devopps99, then a novice, decided to test the functionality of the kill bug to see the results.

As a result, the contract underwent a self-destruction process, freezing all wallets that were operating under the Parity library contract. Hence, over 580 wallets holding an approximated 513,000 ETH were rendered inaccessible instantly. Back then, the total worth of the ETH stored in the wallets was an estimated $150 million, but they have since appreciated to a value exceeding $260 million. Notably, this estimate does not include the value of ERC20 tokens that were also stored in the wallets.

Working Mechanism of EIP 999

The proposal justifies itself by declaring that it is necessary because the Ethereum protocol restricts the recovery of self-destructed contracts. Also, this is the only way through which owners of affected wallets can reclaim their ETH and ERC20 tokens. Unlike other preceding EIPs, EIP 999 will not alter EVM semantics and will seek to unfreeze funds using a single state transition.

If EIP 999 is to be executed, a hard fork would be mandatory since the Ethereum protocol does not permit the reinstatement of self-destructed contracts. Consequently, Afri Schoedon proposed that EIP 999 should be added to the lists of EIPs to be implemented during the next hard fork on Ethereum’s schedule, known as Constantinople.

EIP will be hopeful that the Ethereum community will go easy on them this time, as previous efforts to recover frozen funds have been shot down. Nonetheless, if the DAO fork is anything to go by, then this proposal can actually work.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

2 × two =