The Liquid Network is running again after the $320M exploit but I would not call this a full recovery yet.

The headline number is impressive.

Around 4,000 BTC was withdrawn during the September 6 incident and roughly 3,400 BTC has now returned to the Federation reserve.

That leaves around 600 BTC still unrecovered.

But the bigger detail for me is what has not come back yet.

Block production and regular transactions have been operating normally since September 10. Wallets and ecosystem services are also gradually returning. Users can move LBTC again and some services have restored peg ins.

Yet peg outs remain suspended.

That distinction matters because peg outs are the route that lets users convert LBTC back into BTC outside Liquid.

So the network can look healthy on the surface while one of the most important trust functions is still restricted.

The technical side also appears clearer now.

The exploit path has been identified and Elements v23.3.4 has already been released with an immediate fix. That removes one major uncertainty.

But fixing the vulnerability does not automatically restore confidence.

Users still need to see the remaining BTC situation resolved. They also need exchanges wallets and bridge related services to fully support normal movement again.

There is another interesting point here.

Aqua has restored liquid asset transfers and peg ins while its Indra swap allows LBTC and BTC swaps through Lightning. But liquidity remains limited.

That tells me recovery is happening in stages rather than through one big switch.

For me the real recovery milestone is therefore not 3,400 BTC returning.

It is the moment when peg outs resume and liquidity across the ecosystem becomes normal again.

Until then I would describe Liquid as operational but still in recovery mode.

The exploit may have been technically contained.

The harder part now is proving that the network can operate normally again without the restrictions that were introduced after the attack.