Osmosis Community Flags bOSMO Bug After 50% Redemption Overpayments

The Osmosis community disclosed a flaw in Backbone Labs' bOSMO contract that caused redemptions to pay about 50% more Osmosis (OSMO) than the normal rate, reducing the assets backing remaining holders.

Since at least April 2026, a redemption returned roughly 1.676 OSMO compared with a normal rate of about 1.117 OSMO, an excess of roughly 50%. Those additional payouts reduced the asset backing available to remaining bOSMO holders.

To limit further effects, the community pool redeemed 776,000 bOSMO on Oct. 10, withdrawing about 1.3 million OSMO and nearly exhausting the contract's reserves. The large redemption was intended to keep the flaw from affecting other holders.

The Osmosis community plans to send about 40,508 OSMO to 1,037 accounts after the funds are unstaked Oct. 24. It warned users not to purchase bOSMO or add liquidity to associated pools. bOSMO is a liquid staking token issued by Backbone Labs.