Liquid Network loses 3,996 BTC after range-proof cache flaw; 3,400 returned

The material fact here is not the loss but the mechanism: a consensus-level cache bug in Elements let unsupported L-BTC pass verification, and the federation's signer threshold did not catch it before peg-out. That reframes the risk conversation around sidechain and federated-bridge designs, where security depends on both node software correctness and signer diligence rather than Bitcoin's base-layer guarantees. A partial voluntary return leaves the remaining shortfall unresolved, and whether the federation's reserves are made whole — or the loss is socialized — is the open question.