Polygon Labs weighs hard fork for asset recovery after Polymarket and Binance hacks

• A hard fork proposed by the Polygon Labs team would recover POL associated with the Polymarket and Binance hacks.
• Under the hard fork, a recovery wallet will receive 23.86 million POL linked to Polymarket and 46.63 million POL from Binance.
• Discussion of the proposal is set for Thursday; approval would be followed by an implementation period of roughly two weeks.

Assets linked to the Polymarket and Binance hacks are the focus of a new Polygon Labs improvement proposal seeking a hard fork of the Polygon Proof-of-Stake (PoS) mainnet. Under the proposal, validators would be required to move POL tokens held at five attacker-controlled addresses to verified recovery addresses. This would be an exceptional, one-off governance intervention to reverse the effects of the hacks.

Proposed hard fork seeks return of blocked assets 

Roughly 28 million POL on Polygon PoS were identified in Polymarket’s final investigation report into its 30 October security incident, with 24 million POL subsequently frozen on request. The report on the $6.3 billion Binance hack likewise recorded a similar transfer of over 46 million POL tokens from Binance’s own hot wallet. Across five attacker-controlled addresses, the total holding amounts to 70.49 million native POL. Polygon’s block producers have placed those addresses on the Bor transaction block list.

Blocking the assets provides only a temporary safeguard. Each block producer loads the Bor list at startup, meaning that updates depend on restarts or span rotations. Nor do entries expire automatically, and the filter applies only to certain transaction types. In attempts to circumvent these restrictions, the attackers have tested transactions offering high fees and approached validators with offers of lucrative payments to unblock the funds.

With tens of millions of POL left locked indefinitely and no route to a refund, the mechanism remains fragile. A member of the Polygon Labs team has therefore proposed the drastic step of a PoS mainnet hard fork under Section 5 of the Specification and the Rationale.

Wednesday’s Polygon Protocol Governance Call is due to hear the Polygon Improvement Proposal (PIP). Implementation would be expected to take roughly two weeks if approval is granted.

Moving balances without private keys, as envisaged by the PIP, demands a consensus change; a hard fork is therefore the only technical route available. Those behind the proposal stress that it is not a general-purpose tool for freezing or recovering assets and should not become a routine practice. 

To justify the hard fork, the PIP sets out six verifiable conditions: public acknowledgement by the victims; universal application of the blocklist; a large sum involved; clear on-chain tracing to reputable parties; a request for the remedy from the victims themselves; and no competing claims following public disclosure.

Alternatives were also examined and rejected by the proposers. These included keeping the funds locked, depending on the attackers’ co-operation and developing a permanent recovery mechanism at protocol level rather than proceeding with a hard fork.