#EIP-999: Why A Vote To Release Parity Locked Funds Evoked So Much Controversy

Parity’s recent call for a vote on their submitted EIP-999, which would allow for affected users to regain access to their assets stored in the multisig wallet, caused a stir within the Ethereum community, even prompting Vitalik Buterin himself to call for a boycott of Consensus 2018, stating “sensationalist” coverage of EIP-999 as part of the reason.

The situation started with the July 2017 Parity hack, which resulted in the loss of 150,000 Ethereum (ETH). Parity fixed the vulnerability in the code, but unfortunately the redeployed smart contract code came with yet another vulnerability. This new vulnerability was accidentally exploited by a Parity user in Nov. 2017, causing over 513,774 ETH held in 587 different wallets to be frozen.

The mechanics of the improvement proposal

As a result, parity submitted an Ethereum Improvement Proposal (EIP-999). Their motivation behind the proposal was outlined on GitHub:

“This proposal is necessary because the Ethereum protocol does not allow the restoration of self-destructed contracts and there is no other simple way to enable the affected users and companies regaining access to their tokens and Ether.”

A vote on whether or not to implement the proposed solution was opened on April 17 and ran until April 24. The result was close but came back with a majority 55 percent “no” vote, with 39.4 percent for the proposed change, and a further 5.6 percent of voters saying they don’t care.

A couple of things important to remember - firstly, the 513,774 ETH (worth around $360 mln according to recent price analysis) is not lost or stolen, it’s exactly where it was intended to be stored - i.e. in the Parity multisig library. The problem is that access to these funds has been destroyed due to a vulnerability in the code.

Secondly, EIP-999 was not an outline for a hard fork in the Ethereum blockchain. The proposed solution was for a “patched version of the WalletLibrary” (to the contract source code), which would basically give owners of these dependant multisig wallets access to their closed off funds.

The debate about a hard fork emerged because it seemed two of the biggest Ethereum software companies, namely Geth, a multipurpose command line tool for Ethereum, and Parity Technologies, a popular client for interacting with the Ethereum blockchain, had conflicting thoughts on the implementation of EIP-999.

However, this sentiment has since been quashed by both Geth and Parity, with Geth developer Péter Szilágyi clarifying his position directly on Twitter and Parity founders Jutta Steiner and Gavin Wood stating in a blog post for Parity Technologies they do not plan to provoke a split in the Ethereum blockchain. Although the proposed update was voted down, the controversy surrounding it still lingers.