The invariant nobody wrote down

Graduate · enrolled learners

This lesson opens with The Parity multisig library freeze, 6 November 2017.

What happened

Parity's multisig wallets shared a single library contract that held the wallet logic. The library was deployed on 20 July 2017 but was never initialized, so its own ownership was unclaimed. A user known as devops199 called the library's initWallet function and became its owner, then called its self-destruct function, which was present because the code had been copied from a wallet meant to be retirable. Destroying the library removed the code every dependent multisig wallet relied on through delegatecall, so about 513,000 ETH, worth roughly 280 million dollars at the time, became permanently frozen in wallets that could no longer move funds. There was no theft; the money is still there and still unreachable.

The decision point

Every Parity multisig depended on an invariant nobody wrote down: the shared library will always exist and will always be owned by no one who can destroy it. It was never stated because it seemed too obvious to state, and it was false, because the library was deployed uninitialized and carried a self-destruct function from the code it was copied from. A user, apparently exploring rather than attacking, claimed the unclaimed ownership and destroyed the shared dependency. The lesson is that the invariants a protocol never mentions are the ones that break it, because nobody guards a promise nobody knows they are making. Finding the unstated invariants is harder than reading the stated ones, and it is where the largest surprises live.

Recorded loss

$280,000,000

Orientation and Year One are open: anyone can read them without an account. From Year Two onward the lessons are for enrolled learners, because progress through the later years only means anything if it is tracked against a record.

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