David Schwartz, Ripple’s chief technology officer, defended Arbitrum’s decision to freeze more than 30,000 ETH linked to the recent KelpDAO exploit.
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- Arbitrum’s emergency freeze on ETH follows the same logic as Bitcoin’s rollback did in 2010, David Schwartz said.
- The freeze secured 30,766 ETH associated with the KelpDAO exploit without changing the state of the broader Arbitrum network.
- Critics said the Security Council intervention raised new concerns about centralization and emergency rule powers.
He said the move was similar to Bitcoin’s response to the 2010 overflow bug, when the network accepted a rollback after an attacker created billions of coins.
These comments came after Arbitrum’s security board intervened to freeze 30,766 ETH linked to the exploit. This action secured funds without changing the broader state of the network, but it also renewed debate about decentralization and emergency control.
Schwartz links Arbitrum’s work to the history of Bitcoin
Arbitrum’s Schwartz said answer It should not be seen as a departure from decentralized principles. Communities can reject network status they consider invalid and take steps to correct it, he said.
He pointed to a Bitcoin overflow incident in 2010, when an attacker minted more than 184 billion Bitcoin due to an error. Satoshi Nakamoto and early developers released a patch, and node operators adopted it, rolling back the chain.
In a post on X, Schwartz said: “This is exactly what Bitcoin did in response to the overflow incident.” He said that node operators at the time rejected the database state produced by the existing rules and chose to change those rules.
Schwartz added that no one was forced to accept that previous state of blockchain. He said that this process showed how decentralized networks can behave when users do not accept the outcome resulting from consensus.
The arbitration freeze has sparked criticism over centralization
the Decision security The board froze 30,766 Ethereum after the KelpDAO exploit. Supporters said the move helped quickly secure stolen funds and avoid broader damage to the ecosystem.
Critics said the move raised concerns because the board could upgrade smart contracts on Ethereum’s base layer without requiring each node operator to download a new subprogram. This power has led some users to question how sustainable the network’s decentralization will be in practice.
“The Security Council has the ability to upgrade the smart contract on L1, which is an effective coercion mechanism that has absolutely nothing to do with decentralization,” said one critic, identified as Nakamoto in the report.
These criticisms focused on whether emergency powers held by a small group could fit into a decentralized model. This issue has become a recurring point of discussion across blockchain networks after major exploits have occurred.
The KelpDAO exploit brought a refocus on governance questions
the Exploit KelpDAO It sparked a broader discussion about how networks respond when stolen funds move quickly across chains. In the case of Arbitrum, the board acted to freeze ETH without waiting for a broader governance process.
The Arbitrum community encountered a network situation that it considered illegal, and the council responded to restore order, Schwartz said. He said that this measure reflects the community’s choice and not a rejection of decentralization.
His defense placed Arbitrum’s decision within a long-standing debate about cryptocurrencies. On the one hand there are those who support emergency intervention to recover funds. On the other hand, there are those who argue that such powers weaken the basic idea of decentralized control.
