The TAC Network Halt: Navigating a Billion-Token Exploit and Recovery

The TAC network, an EVM-compatible Layer 1 integrated with the TON ecosystem, remains at a standstill following a massive exploit that drained nearly 30% of its total token supply. For over ten days, block production has been frozen as the team works to resolve a critical vulnerability that allowed an attacker to manipulate delegation records and empty the protocol's bonded staking pool.

The Root of the Critical Vulnerability

The incident stemmed from a technical mismatch between the EVM StateDB and the Cosmos SDK ledger regarding how token balances were tracked. While one system monitored spendable tokens, the other accounted for locked vesting tokens, leading to a flaw where delegating more than the spendable amount caused an unchecked subtraction. This error resulted in an "integer underflow," allowing an attacker to wrap a balance toward an enormous number and effectively zero out the protocol-controlled staking pool. Cosmos Labs identified the flaw as a critical vulnerability, noting that while patches were developed in mid-August, the attack occurred shortly after the exploit path was publicly described by a third party.

Path to Recovery and Network Resumption

To restore the network without a full chain rollback, TAC has proposed a targeted "state edit" to correct specific balances at the halt block. Under this plan, the TAC Foundation will use its treasury reserves to replace approximately 1.25 billion TAC tokens that the attacker successfully sold across the BNB Chain and TON. The recovery strategy also involves freezing and removing 65 million incident-linked tokens still on the network, while the status of 1.66 billion TAC remaining on the BNB Chain is still being evaluated. Full restoration of the network now depends on validators adopting a patched binary and executing the state edit to resume normal block production and preserve legitimate user transactions.