Polygon Labs weighs a hard fork to recover assets from Polymarket and Binance hacks

• Recovery of POL tied to the Polymarket and Binance hacks is the aim of a hard fork proposed by the Polygon Labs team.
• A recovery wallet will receive 23.86 million POL linked to Polymarket and 46.63 million POL from Binance through the hard fork.
• Discussions on the proposal are set for Thursday; approval would be followed by an implementation period of roughly two weeks.

Assets linked to the Polymarket and Binance hacks could be recovered through a hard fork of the Polygon Proof-of-Stake (PoS) mainnet under a new improvement proposal from Polygon Labs. In an exceptional, one-off governance intervention intended to reverse the effects of the hacks, validators would be required to move POL tokens from five attacker-controlled addresses to verified recovery addresses.

Can a hard fork return the blocked assets? 

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

Blocking the assets provides only a temporary safeguard. Each block producer loads the Bor list at startup alone, meaning that updates need restarts or span rotations. The entries also have no automatic expiry, and the filter applies only to certain transaction types. Attackers have sought to circumvent these limits by testing high-fee transactions and approaching validators with offers of lucrative payments to unblock the funds.

With tens of millions of POL locked for an indefinite period and no way to refund them, the arrangement remains fragile. A Polygon Labs team member has 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 scheduled to hear the Polygon Improvement Proposal (PIP). Implementation would be expected to take roughly two weeks if it receives approval.

Moving balances without private keys, as envisaged in the PIP, needs a consensus change; a hard fork is therefore the sole technical route. The proposers stress that the measure is not intended as a general-purpose tool to freeze or recover funds and should not become routine. 

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

The proposers examined but rejected alternatives to a hard fork, including keeping the funds locked, depending on cooperation from the attackers, and creating a permanent recovery mechanism at the protocol level.