L-BTC Lost 95% of Its Reserve. Supply Stayed Put

Liquid's Federation paid 3,996 BTC after invalid L-BTC passed through a valid SideSwap peg-out. The authorization keys were not reported compromised; the token entering the redemption path should not have existed.

The exploit-created L-BTC was burned during redemption. That left the ordinary L-BTC supply in place while the Bitcoin reserve fell from about 4,200 BTC to roughly 197 BTC. Supply accounting remained internally coherent. Backing did not.

For BYKO, fixed supply is an onchain fact; it does not imply a reserve or redemption right, and BYKO makes no such promise. The useful test is whether infrastructure separates total supply, reserve backing, redemption availability and executable price instead of compressing them into one token card.

Sources: Liquid Network, SideSwap, Reuters, The Block, Bitquery.