Core DAO reward glitch halts CORE transfers, supply unclear

Core DAO distributed excess validator rewards to a small group of validators on Aug. 31, prompting two exchanges to restrict CORE transfers while the project investigates the anomaly. Core acknowledged the issue and said it identified the root cause and is working on mitigations.

Core’s public statement noted that “user assets were safe” and that network security and custody systems were not affected. The project described the incident as limited to reward issuance and promised a postmortem after containment. Core has not provided figures for the excess tokens, the identities of affected validators, the reward rounds involved or a technical explanation.

Coinbase opened an incident at 04:41 UTC on Aug. 31 and paused CORE sends and receives, while keeping buys, sells, conversions and fiat transactions active, according to its status feed. At 17:38 UTC the exchange listed the incident as investigating. LBank suspended CORE deposits at 05:00 UTC, citing project requirements; its notice did not mention withdrawal or trading suspensions and gave no restoration time.

Core’s documentation explains validator compensation as a mix of newly minted block rewards and transaction fees, calculated at the end of each round. The validator guide allocates 90% of rewards to validators and their delegators and 10% to the System Reward Contract. Because rewards normally include newly minted tokens, the undisclosed excess amount is central to whether the event advanced scheduled node-mining allocations or created additional tokens outside planned issuance.

Core’s tokenomics fix the total supply at 2.1 billion CORE, with 839.9 million allocated to node mining over an 81-year schedule. The project has not said whether the excess rewards remain transferable or whether it will attempt clawbacks, burns or adjustments to future emissions to address any unintended issuance.

Core indicated the anomaly occurred within the network’s issuance process and separate from user balance and custody systems. The project reiterated that it will publish a postmortem once the issue is contained. Market participants and service providers are awaiting a numerical disclosure and a clear remediation plan to determine any lasting effect on supply and future emissions.