1037 Accounts to Receive Approximately 40,500 OSMO in Compensation as Osmosis Discovers bOSMO Redemption Contract Vulnerability

Odaily News: Osmosis has stated that bOSMO, a liquid staking token issued by Backbone Labs, has a redemption contract vulnerability. Since April 2026, each redemption through the contract has double-counted OSMO staked by Backbone's own validators, causing redeeming users to receive approximately 50% more OSMO than they should be entitled to, with the excess paid out borne by other bOSMO holders. To prevent further harm to other holders from community pool redemptions, relevant parties executed a single transaction on October 10 to redeem approximately 776,000 bOSMO and withdraw approximately 1,299,700 OSMO. The OSMO involved in this redemption is expected to complete unbonding on October 24. Osmosis will compensate the 1,037 accounts that held bOSMO at the time of the snapshot with approximately 40,500 OSMO, based on a pre-redemption ratio of 1.1174 OSMO per bOSMO. The compensation will be automatically distributed after unbonding is completed on October 24, requiring no action from users. Following the redemption, the asset backing of bOSMO has dropped significantly, and redeeming each bOSMO through Backbone now yields only approximately 0.06 OSMO. As the vulnerability remains unfixed, the market can still mint new bOSMO at a cost of approximately 0.039 OSMO, and pricing in some liquidity pools may be significantly higher than the actual redemption value. Osmosis advises users not to purchase bOSMO or provide liquidity to related liquidity pools, and recommends that existing liquidity providers withdraw their funds.