Liquid Network Starts External Audit as Peg-Out Keys Are Updated
The review covers Elements v23.3.4 while the Federation coordinates changes to its peg-out authorization key list and keeps withdrawals paused.
Liquid Network has begun an independent external security audit of Elements v23.3.4 as it works toward restoring peg-outs, which allow Liquid Bitcoin (L-BTC) holders to redeem the token for Bitcoin (BTC).
The Liquid Federation is coordinating an update to its peg-out authorization key (PAK) list. The process includes replacing existing entries and ensuring all peg-out keys are held in cold storage.
The audit and key-management work are part of the steps needed to resume peg-outs from the Bitcoin sidechain. Peg-outs remain paused, while block production and regular network activity, including L-BTC transfers, resumed Sept. 10.
Blockstream developed Liquid as a Bitcoin sidechain that supports L-BTC transfers. Liquid released Elements v23.3.4 as an emergency software version on Sept. 9. The update addressed a proof-verification caching vulnerability and strengthened cache keys used for range proofs.
Liquid previously identified full one-to-one Bitcoin backing, software updates, testing and independent security reviews as requirements for restarting peg-outs. It has not provided a firm restoration date, leaving users waiting to convert L-BTC back into BTC, as detailed in earlier coverage.
