Over the past several weeks, the Liquid Federation, working closely with Blockstream and independent security experts, has undertaken a comprehensive effort to strengthen network security, refactor network accounting, and validate the safeguards necessary for the safe resumption of full operations.

A critical milestone has been the successful deployment of updated Federation software responsible for managing the network's bitcoin reserves. These updates accommodate the network's post-incident accounting state and enable the continued secure management of Federation funds.

With a sufficient number of Federation functionaries now updated, the network has reached an important state of operational readiness for the next phase of recovery. Multiple independent safeguards remain in place to prevent premature or unauthorized peg-outs while the final restoration steps are completed.

Resumption of Liquid Network Swaps

As the next stage of expanded network functionality, semi-automated BTC<>LBTC swaps are being enabled in coordination with participating swap providers, without protocol-imposed volume limits on this service.

For most users accessing Liquid through supported swap providers, this will restore a practical means of converting LBTC to BTC, even while direct Federation peg-outs remain restricted.

This staged approach allows additional network functionality to resume while maintaining the security controls established throughout the restoration process.

Resumption of Federation Peg-Outs

The final phase of restoration involves reestablishing the network's full 1:1 bitcoin backing, followed by the controlled reactivation of Federation peg-outs for authorized PAK key holders.

The Federation, Blockstream, and independent security experts have made substantial progress toward this objective, with the necessary technical infrastructure and safeguards now in place.

With the technical foundations established, the Federation is preparing for the next phase of restoration, including the resumption of normal peg-out functionality and transparent monitoring of the network's bitcoin reserves through block explorers, subject to completion of the remaining security and operational requirements.

The restoration process has prioritized not simply returning the network to normal operations, but strengthening its security, resilience, and transparency for the long term.

Further updates will be provided as each stage is completed.