Liquid Reserve Gap Falls to 250 BTC After 300 BTC Top-Up

Liquid’s federation wallet received 300 $BTC on Nov. 2, narrowing the bitcoin reserve shortfall backing L-$BTC to about 250 $BTC.

The transaction, confirmed in Bitcoin block 974299, sent exactly 300 $BTC to an address listed in the Liquid federation wallet. JAN3 CEO Samson Mow wrote on X: “Shortfall is now reduced to 250 $BTC.”

At about 3:55 p.m. ET on Nov. 2, Mempool’s Liquid explorer listed 3,717.94 $BTC in reserves, indexed through the block before the transfer, against 4,267.94 L-$BTC in circulation. Adding the confirmed 300 $BTC puts estimated reserves at 4,017.94 $BTC and coverage at 94.14%, according to The Defiant’s calculation.

That compares with a 550 $BTC gap and about 87.07% coverage reported on Oct. 28, following a 50 $BTC top-up.

Liquid is a Bitcoin sidechain whose L-$BTC token is intended to be backed one-for-one by bitcoin. The reserve gap follows a Sept. 6 exploit of Elements, the software underlying Liquid. According to Blockstream’s incident assessment, the exploit created about 4,000 unbacked L-$BTC that was converted into bitcoin through peg-outs. Blockstream said 3,400 $BTC was returned on Sept. 7.

Full Backing Before Direct Peg-Outs

The smaller shortfall brings Liquid closer to the reserve requirement in its staged recovery plan. The plan calls for restoring full one-for-one backing before controlled reactivation of direct federation peg-outs—withdrawals from its bitcoin reserves—for authorized Peg-out Authorization Key holders.

User swaps are a separate route to bitcoin. In an Oct. 27 update, the federation said one-for-one $BTC and L-$BTC swaps were available through AQUA, Bull Bitcoin and SideSwap. It said normal federation peg-outs remained subject to enhanced operational controls while security hardening continued and an independent security audit neared completion.