In a Monday Twitter thread, Coinbase’s director of product strategy and business operations Conor Grogan categorized thousands of instances of Ethereum typos, user errors, and buggy contracts, discovering that 636,000 ETH, or 0.5% of Ether’s circulating supply, has been lost forever as a direct result of such errors.
“To be clear, this $1.1B+ number significantly undershoots the actual lost/inaccessible ETH amount. It just covers instances where Ethereum is locked forever,” Grogan noted, pointing out that the number of coins that are removed from circulation and can’t be recovered can be much higher.
“For example, it doesn't cover lost private keys or things like Genesis wallets that have presumably been forgotten,” the Coinbase director added.
The biggest one-time loss of Ether — some 513,000 ETH from 178 wallets — occurred in November 2017, when wallet provider Parity discovered a critical vulnerability in its smart contract that allowed users to drain balances of addresses that didn’t belong to them. To prevent the massive hack, someone “suicided” the wallet, deleting its code and freezing all coins contained within.
The second-biggest loss — around 60,000 ETH — was incurred by the now-defunct cryptocurrency exchange Quadriga as a result of a bug in its smart contract, and the third place was taken by Akutars NFT collection that lost 11,500 ETH to a faulty mint.
“Crypto can be hard sometimes. On the flip side, that’s a lot of ETH that can't be sold,” Grogan joked. Well, guess we are bullish now?