Polygon is considering an unusual network upgrade that could return approximately $6.5 million in stolen cryptocurrency linked to separate security incidents involving Binance and Polymarket.
A proposal submitted by a member of Polygon Labs’ Validator Support Team calls for a hard fork of the Polygon Proof-of-Stake network to transfer approximately 70.49 million POL tokens from five attacker-controlled addresses to recovery wallets belonging to the affected platforms.
The proposal comes after Polygon block producers restricted transactions from the identified addresses to prevent the attackers from moving the funds. However, the existing restrictions cannot return the tokens to their original owners.
The proposed hard fork would change the network’s rules to move the specified balances without requiring the attackers’ private keys.
The proposal remains subject to governance approval and technical testing. No hard fork has been implemented.
Binance and Polymarket account for 70 million POL
The proposal targets funds linked to two separate security incidents reported in late October.
Approximately 46.63 million POL, associated with the Binance breach, sits in one of the identified addresses. Another 23.86 million POL across four addresses is linked to the Polymarket incident.
Together, the balances total approximately 70.49 million POL. The proposal valued the tokens at around $6.5 million using POL’s price on October 29. The dollar value may change with the token’s market price.
The incidents are separate. The Binance breach involved unauthorised cryptocurrency transfers from exchange-controlled wallets, while the Polymarket incident involved a security compromise that affected users of the prediction market.
Polygon’s existing transaction restrictions have prevented the identified POL balances from being moved through the blocked addresses. However, keeping the assets locked does not resolve the question of how they can be returned.
How the proposed hard fork would work
A hard fork is a change to a blockchain’s rules that requires participating network operators to upgrade their software to remain on the updated chain.
Under the proposal, Polygon would modify the balances of the five identified addresses at a predetermined block. The balances would be set to zero, and equivalent amounts would be credited to verified recovery wallets designated by Binance and Polymarket.
The operation would not create additional POL tokens. Instead, it would reassign existing balances, leaving the network’s total token supply unchanged.
Before the change could proceed, the affected platforms would need to verify ownership of their designated recovery wallets. Polygon developers would also need to prepare updated software and test the proposed changes on the Amoy testnet.
If approved, development and testing could take approximately two weeks, according to the proposal.
The proposal raises questions about blockchain immutability
The proposal presents Polygon with a difficult choice: leave the assets locked indefinitely or change the network’s rules to return them to the affected platforms.
Blockchains are generally designed so that confirmed transactions cannot be reversed by a central authority. A hard fork that reallocates assets challenges that principle, even when the stated goal is recovering stolen funds.
Supporters of the proposal argue that the intervention would be limited to five identified addresses and would not introduce a permanent mechanism for freezing or recovering assets.
However, the decision could raise concerns about how future disputes might be handled and what circumstances could justify similar interventions.
The proposal’s author describes the measure as an exceptional action that should not become routine. The proposal also acknowledges the risks of a chain split if validators and other network operators fail to upgrade their software in coordination.
What happens next?
The proposal is scheduled for discussion during Polygon’s governance process. Approval, technical implementation and coordinated upgrades by validators and infrastructure providers are required before the balances can be moved.
Until those steps are completed, the funds remain restricted, and the proposed recovery has not taken place.
The outcome could become an important test of how Polygon balances the recovery of stolen assets against the principles of decentralisation and transaction immutability.
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