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Backbone’s bOSMO staking contract has a defect that pays out about 50% more OSMO than it should on every redemption.
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The community pool held about 97% of all bOSMO. To recover it without letting the defect take OSMO from other holders, almost all of the OSMO in the contract was redeemed in a single transaction on 10 October.
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Every other bOSMO holder at that moment is being compensated in full, at the contract’s own redemption rate from just before the redemption: 1.1174 OSMO per bOSMO. That’s about 40,508 OSMO across 1,037 accounts.
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You don’t need to do anything. Payments are sent automatically after the redeemed OSMO arrives on 24 October.
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bOSMO now has very little backing. Please don’t buy bOSMO or provide liquidity in bOSMO pools.
What happened
bOSMO is Backbone Labs’ liquid staking token for OSMO. Its staking contract holds staked OSMO and is meant to pay each redeeming holder their share at the current redemption rate, about 1.117 OSMO per bOSMO.
While preparing the community pool’s redemption, we found that every redemption since at least April 2026 has paid about 1.676 OSMO per bOSMO instead. The extra OSMO comes out of the backing for everyone else’s bOSMO, so each redemption quietly left the remaining holders with less.
The cause is a bug in the staking contract’s code. When it calculates how much to pay, it counts the OSMO staked with Backbone’s own validator twice. A newer version of the contract code fixes it.
How the community pool’s bOSMO was redeemed
Governance approved withdrawing the community pool’s Margined vault positions and burning the recovered OSMO in Proposal 1049. One of those vaults held about 1,137,000 bOSMO, roughly 97% of the supply.
Because of the defect, there were only two options:
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Redeem the community pool’s bOSMO in small amounts. Each redemption would have been overpaid at the expense of the other holders.
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Redeem in one go, and compensate the other holders directly.
The second option was the only one that treats every holder fairly. On 10 October, 776,000 bOSMO was redeemed in one transaction, which draws about 1,299,687 OSMO, almost all of the OSMO in the contract. That OSMO finishes unbonding on 24 October.
Compensation for bOSMO holders
Every account that held bOSMO at block 72,237,940 (10 October 2026, 02:59 BST), the block the redemption ran, is paid the value of its bOSMO at 1.1174 OSMO per bOSMO. That’s the contract’s own redemption rate just before the redemption, so holders receive what their bOSMO was worth before anything changed.
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About 40,508 OSMO goes to 1,037 accounts. It will be sent directly to your wallet once unbonding completes on 24 October.
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bOSMO held inside contracts is paid to the people behind it, read from each contract’s records at the snapshot block:
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liquidity providers in the bOSMO pools;
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Necropolis marketplace users with open offers or unclaimed proceeds, and sellers whose listed NFTs received bOSMO airdrops;
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Galactic Mining Club stakers with unclaimed rewards;
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holders of the FractalFun fMAD vault;
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accounts with open orders.
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Accounts worth less than 1 OSMO in total aren’t paid, because a payment would cost about as much as it’s worth.
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The community pool’s own bOSMO isn’t compensated. Its value comes back through the redemption. The community pool has not lost OSMO on this deployment, but has also not met the expected gains from staking and trading.
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Accounts that took advantage of the defect after the redemption are excluded.
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Backbone Labs’ own bOSMO isn’t compensated. Its share, about 2,787 OSMO, goes toward reimbursing the sellers of NFTs bought on Necropolis (below).
The full recipient list and the excluded list are linked below. If you held bOSMO at the snapshot and can’t find your address, or think your amount is wrong, reply in this thread with your address, and we’ll check it.
If you still hold bOSMO
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Your compensation is fixed to your balance at the snapshot. Selling, redeeming or transferring bOSMO afterwards doesn’t change it.
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Your remaining bOSMO is now worth very little. Redeeming it through Backbone returns roughly 0.06 OSMO per bOSMO. Whether you redeem it or hold it is up to you.
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bOSMO bought after the snapshot is not compensated.
Please avoid bOSMO and bOSMO pools
Until the contract is updated, the defect still applies, and anyone can still mint new bOSMO at about 0.039 OSMO each. Some bOSMO pools still price bOSMO well above what it can now be redeemed for, and liquidity in them can be drained by trading against that gap. If you provide liquidity in a pool that contains bOSMO, we recommend withdrawing it. We also recommend not buying bOSMO.
We’ve told Backbone about the defect and the fix, and are working with them on it.
NFTs sold on Necropolis for bOSMO
Necropolis prices every listing in bOSMO. Listings made before the redemption still asked the same number of bOSMO, which could now be minted for a small fraction of what it was worth.
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On 13 and 14 October, one account bought 27 NFTs this way: 6 Mad Scientists and 21 Galactic Mining Club. They were listed at 62,571 bOSMO, about 69,920 OSMO at the old rate, and the buyer spent about 2,519 OSMO.
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Necropolis was frozen on 15 October at 02:32 BST, so no more listings can be bought. Cancelling a listing still works while it is frozen.
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If you have NFTs listed for bOSMO, you can still cancel your listing; otherwise, all bOSMO listings will be cancelled automatically soon.
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These sales happened after the snapshot, so the compensation above doesn’t cover them. We’re looking at what can be done for the sellers and will update this thread.
What happens next
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24 October: the redeemed OSMO finishes unbonding and is withdrawn.
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Shortly after: the compensation payments are sent.
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Then: the rest of the recovered OSMO is burned, as Proposal 1049 set out.
We’ll post here when the payments are sent.