Degen

How Some Funds Were Lost During the Degen Chain Outage

In this thread, I'll share an example of how some DEGEN funds were lost due to the outage and how, in some cases, funds may still be recovered.

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1/ Let's take a look at this NFT contract called Vital Bond: https://explorer.degen.tips/address/0x7b9E39A8C08ad67355AaA9848D592D0826cC8049 

As you can see, there were 14 mints of this NFT, all successful transactions. 

But this NFT contract does not exist anymore...

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3/ How do you see if a smart contract still exists or not?

Currently, only by querying the blockchain directly (via RPC). You can write a simple script using the ethers.js library like this:

4/ So what happened with this NFT contract?

Initially, it was successfully created on Degen Chain via a "launch" transaction. 

After the NFT was launched, there were 14 "mint" transactions by various users, all successful transactions.

5/ But then the outage came due to a serious bug. 

To fix the bug, the blockchain needed to be rolled back to a state before the bug. 

This meant that many blocks of transactions were effectively removed from the blockchain.

6/ To mitigate this issue, the team managing Degen Chain (Conduit) started submitting transactions from removed blocks back to the chain. 

But when a transaction is submitted, it does not go directly into the blockchain. It first goes to some sort of waiting room, a "transaction queue."

7/ This is fine, but there's a caveat. If a transaction does not get processed and included in a block in a timely fashion, it can get removed from the queue. 

Because there were too many transactions waiting to be included back into a block, this is what happened with many of them. They were removed from the queue.

8/ In the case of that NFT collection, it just so happened that the transaction which created the NFT collection DID NOT go through, while the following mint NFT transactions DID go through successfully.

9/ This means that these mint transactions sent DEGEN to an address that has no smart contract code. 

To an address which no one controls. 

Effectively, these funds are now locked in that address and cannot be recovered.

10/ Luckily, not much DEGEN tokens were sent to this (former NFT) address in my example, only 20 DEGEN in total. 

But there are other such cases on Degen Chain, some of them with many more DEGEN locked.

11/ For some of them, there may be a way to recover these funds if a smart contract was not created via a factory contract, but was instead manually deployed. 

In that case, the deployer could create a new smart contract with a function that allows the owner to recover the funds.

12/ This smart contract could be deployed to the same address where the funds are locked. 

This is possible because the contract address is determined through a combination of the deployer's address and a nonce.

13/ Important: If you are a developer with such a case (missing smart contract and locked funds), make sure not to do any transactions with the deployer address until you are ready to deploy the contract which will recover the funds.

14/ Your transaction order (nonce) number is an important part of determining the contract address, so if you go past the correct nonce number, you won't be able to get the right contract address.

Feel free to reach out in case you'll want to discuss how to recover funds.

15/ Note that old transactions that appear as pending on the block explorer are not actually pending anymore; they just haven't been removed from the explorer's internal database yet.

The worst is behind us, and now it's time to clean up. Degen Chain survived and will come out of this stronger than before 💪😎🎩

2/ "Wait, what? I can literally see it on the block explorer!"

The block explorer still shows it, but this contract does not exist anymore on Degen Chain. The explorer shows it because it stored contract data in its own database for faster querying. 

If you query the chain directly, you'll see it's not there anymore.