Polkadot has disclosed an XCM accounting error that it estimates reduced the Treasury’s liquidity-provisioning position by $1.3 million. A 26 October forum notice says the Technical Fellowship fixed the underlying bug and secured impacted assets. It reports no effect on user wallets or funds and says users need take no action.

Accounting mismatch and the proposed correction

The notice attributes the loss to approximately 4.06 million dotUSD disappearing from recorded supply while remaining in the DOT/dotUSD pool. The resulting pricing imbalance attracted arbitrage. These are the project’s reported findings and loss estimate; NetNapz has not independently reconstructed the transactions.

In a 27 October follow-up, the same thread announced referendum 1961. Its proposal would recompute dotUSD issuance from existing account balances without changing individual holdings. It also seeks to restore earlier Snowbridge execution weights after the latest Bridge Hub upgrade put bridge operation on hold.

At the 28 October source check, SubSquare displayed the referendum as Deciding. Approval, execution and restored bridge operation were not established. A full incident post-mortem remained promised.

Code merged is not a completed runtime repair

The linked Fellowship runtime pull request 1334 was marked merged on 28 October. It describes reconciling recorded issuance with balances already present on Asset Hub. That repository milestone establishes code integration, not successful on-chain enactment of the referendum.

NetNapz assessment

The distinction between Treasury liquidity and personal balances matters. The disclosed estimate concerns the Treasury’s pool position; treating it as a loss from every holder’s wallet would misstate the notice. Equally, a statement that the underlying bug is fixed does not prove all resulting accounting and bridge problems have cleared.

The next useful evidence is a final governance outcome, execution confirmation, reconciled supply and a verified Snowbridge service update. Until then, the proposed repair remains a dependency. No DOT price effect, compensation programme or final loss accounting is asserted here.

For background, NetNapz previously covered the approved dotUSD framework. This incident report addresses later operational evidence, rather than presenting the earlier plan as newly announced.

Verification scope

The project forum, referendum page and linked runtime pull request were checked on 28 October 2026 at 22:17 GMT. The featured attachment and its attribution were verified and the logo visually inspected. NetNapz did not connect a wallet, submit a transaction, test the runtime or independently audit the loss calculation.