Matter Labs Addresses Frozen 921 $ETH Issue

Matter Labs, the development firm behind zkSync, an Ethereum Layer 2 scaling solution, has acknowledged that precisely $921 ETH, valued at roughky $1.7 million, is currently trapped in the GemstoneIDO smart contract.

Despite this, the firm asserts that the funds are secure and that an “elegant” solution to recover the trapped funds is being developed.

The funds became trapped during the Gemholic token sale, and Matter Labs initially stated that these would not be “stuck forever.”

In a recent tweet thread, the company revealed that it had found an “elegant” solution to “unfreeze” the GemstoneIDO contract and transfer the funds out.

@GemholicECO, who ran into a problem with their smart contract on zkSync Era, has reached out to us for support, which we provided.

We’d like to give the community an update and further context on their issue in full transparency, as we always have and always will.

🧵👇

— zkSync ∎ (@zksync) April 7, 2023

The issue was traced back to the .transfer() function in the GemstoneIDO smart contract, which is part of a project run by the GemholicECO ecosystem. Matter Labs indicated that the problem could have been prevented if the contract had been deployed on a testnet first, and if best practices in smart contract interaction were followed through and through.

The faulty function originated from zkSync Era, a new type of Ethereum Virtual Machine (EVM) zero-knowledge proof rollup that executes smart contracts much faster than on the base layer. However, zkSync Era is not EVM-equivalent, meaning that it is only compatible with the EVM at a bytecode level, causing some functions to behave differently in the new environment.

Matter Labs justified its design choice by stating that zkSync Era could process some transaction types between 10 to 1,000 times cheaper than other EVM rollups. Nevertheless, they accepted responsibility for the mistake and reassured members of the zkSync ecosystem that they would continue to resolve similar issues relentlessly.

The trapped funds raised concerns among the CryptoCurrency subreddit’s members, who expressed their frustrations about the potential risks associated with rushing a mainnet launch and the need for increased consideration for users’ funds.

Matter Labs launched zkSync Era on the mainnet last week, initially promising that decentralized exchanges Uniswap and SushiSwap would be live within days. While this has yet to happen, projects like Argent, Celer Network, and MetaMask are currently live on the network.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.