Core DAO says validator reward exploit is contained and an emergency hardfork is being coordinated

@Coredao_Org has moved to contain a validator reward exploit on its network, confirming that the affected validators can no longer draw block rewards above the protocol's intended issuance rate. An emergency hardfork is now being coordinated with validators to deploy a permanent fix, framed by the project as a forward upgrade rather than a rollback.

What Happened

Core DAO first disclosed the problem on Monday, describing it as an issue involving a small number of validators. The project has since sharpened its language, now characterising those validators as malicious. The core of the problem was that certain validators were able to claim block rewards in excess of what the protocol's issuance schedule permits.

To understand the significance, it helps to know how $CORE rewards are structured. The token's emission follows an 81-year schedule with a 3.61% annual reduction rate for consensus block rewards, creating predictable, gradually decreasing issuance similar to Bitcoin's halvings but with a smoother curve. Any validator drawing rewards above that schedule represents a breach of the protocol's fundamental monetary rules.

Core's response involved acknowledging the irregular reward activity, though the project has not publicly disclosed the precise technical cause of the excess issuance. No figure has yet been provided for the total amount of $CORE issued above protocol limits, and a full post-mortem is still to come.

User Funds and Next Steps

Core has said that the network remains operational and that user funds have not been compromised. The company also indicated that the anomaly did not affect fund custody.

Further updates from Core are expected to provide greater clarity on how the anomaly occurred, which validators were affected, and what measures are being implemented to prevent a recurrence. The emergency hardfork, once executed, is intended to close the vulnerability at the protocol level and make a repeat occurrence impossible.

The incident is a reminder of the risks that can arise when a small number of validators act outside protocol rules in a delegated consensus system. On the Core blockchain, validators are essential nodes responsible for maintaining the network's security, decentralization, and integrity, validating transactions, producing new blocks, and participating in governance through Core's unique Satoshi Plus consensus. The concentration of block-producing power in a defined validator set means any coordinated misbehaviour among that group can have outsized consequences for issuance integrity.

Sources:
Core Blockchain Fixes Validator Reward Issuance Anomaly, CoinTrust
CORE Token Overview, Core DAO Official Documentation
Validators on the Core Network, Core DAO Official Documentation