Will a hard fork to wipe hacker address balances set a precedent for Polygon on behalf of Binance?

Original | Odaily@OdailyChina)

Author | Golem (@web3_golem)

If a hacker's stolen assets have already been frozen on-chain, but the hacker still refuses to return them voluntarily, is it necessary to directly tamper with the hacker's address balance through a hard fork? Tonight, Polygon will confront this very question head-on.

On November 5, Polymarket and Binance submitted a hard fork proposal to Polygon, which would use a Polygon PoS mainnet hard fork to directly zero out approximately 70.49 million POL (worth $6.7 million) in the hacker's attack addresses and credit an equivalent balance directly to recovery addresses designated by Polymarket and Binance. The hacker's assets would vanish into thin air, while Polymarket's and Binance's addresses would gain an equal amount out of nowhere—but with one decrease and one increase completing the reconciliation, the total POL supply remains unchanged.

This proposal traces back to two security incidents that occurred at almost the same time. On October 30, Polymarket's frontend and Binance's hot wallet were both breached by hackers. Polygon validators responded quickly, freezing 4 Polymarket hacker addresses (involving 23.86 million POL) and 1 Binance hacker address (involving 46.63 million POL), promptly preventing the hackers from moving the stolen assets.

Freezing assets is easy enough, but recovery remains difficult. Polymarket had sought cooperation from the hacker but received no reply. According to the proposal, the hacker even contacted Polygon validators, offering to pay cash in exchange for unblocking the addresses.

To prevent validators from wavering, Polymarket and Binance jointly submitted this hard fork proposal. At 22:30 Beijing time on November 5, the Polymarket and Binance teams will present their case at the Polygon Protocol Governance Call (PPGC). What choice will the Polygon community make—help Polymarket and Binance combat theft, or uphold the chain's immutability and its own decentralized credibility?

Will Polygon Clean Up Polymarket and Binance's Mess at the Cost of Its Reputation?

As of press time, although Polygon officials, relevant PPGC members, and Polygon core developers have not publicly taken a stance on this proposal, the probability of it passing is actually not high.

In the crypto industry, whenever a project suffers a security incident, it has become an industry consensus for relevant parties to help freeze the hacker's stolen assets and jointly protect users. However, directly tampering with on-chain address balances to help a project recover assets—this kind of "cleaning up the mess" behavior—has never had any precedent.

Freezing assets and moving funds without keys are two completely different concepts. While the former also involves centralized intervention, it still operates under existing rules by restricting transaction permissions for specific addresses without changing the actual ownership of the assets. The latter, however, means that even without a private key signature, the protocol can directly zero out the balance of an address and transfer it to another address. This severely violates two of the most fundamental principles of the crypto industry: on-chain data immutability and "Not your keys, not your coins."

If Polygon can today, because an address is deemed a hacker address, bypass private key control to transfer its assets through a governance process, then tomorrow could users' assets be zeroed out in the same way? Blockchain trust is built not only on how rules are described, but more importantly on whether those rules can be broken. Once this precedent is set, other projects in the future will all have reason to demand that Polygon handle their own security incidents using the same logic.

Polymarket and Binance emphasized in the proposal that this operation targets only the specific addresses involved in the two security incidents of Polymarket and Binance, should not become a routine operation, and does not mean Polygon will establish a universally applicable asset freezing and recovery mechanism.

But from a practical perspective, Polygon has no obligation to clean up their security incidents, especially since the cost Polygon would pay is its own decentralized reputation—the risks it bears are not commensurate with the actual benefits it would receive.

The assets proposed for recovery amount to approximately 70.49 million POL, worth about $6.5 million in total. For two massive industry players like Polymarket and Binance, this is not an unbearable loss—especially since both have already fully compensated users out of their own pockets. This hard fork proposal is simply an attempt to use their industry influence or resources to ask Polygon to help them recover some losses.

But what exactly would Polygon gain from this hard fork? Helping two ecosystem partners recover assets might earn some relationship maintenance and goodwill from both communities, but this cannot directly translate into Polygon's network revenue, user growth, or ecosystem competitiveness. On the contrary, once the hard fork is implemented, Polygon will face the question: is it still a decentralized network worthy of trust?

Therefore, weighing long-term reputation against the degree of vested interests, this proposal is likely to fail.

Historical Precedents of Tampering

Historically, there have indeed been cases of directly intervening in hacker address balances through hard forks to recover stolen funds. The most classic example is the Ethereum The DAO incident.

In 2016, The DAO smart contract was exploited, and hackers stole approximately 3.6 million ETH, worth over $50 million at the time and accounting for about 14% of the total ETH supply at that time. The Ethereum community ultimately decided to use a hard fork to transfer the hacker's address balance, moving the funds into a refund contract and ultimately returning them to investors.

But the cost was that this hard fork caused a severe community split. Opponents chose to continue maintaining the original chain, giving birth to Ethereum Classic (ETC). This incident is still regarded as a landmark event in blockchain governance and a classic debate case between "Code is law" and "social consensus can intervene in the network."

The most recent case is Core Network. On October 31, approximately 97 million CORE staked through the b14g protocol were withdrawn without authorization and transferred to addresses controlled by hackers. On November 2, Core Network announced the execution of a hard fork, using a one-time on-chain state adjustment to transfer and recover 68,146,177.22 CORE from three attacker-controlled addresses, representing about 70.2% of the CORE affected in the October 31 incident. The recovery method is essentially similar to the current Polymarket and Binance proposal to Polygon.

Although both hard forks succeeded, they both occurred in situations where the project teams were unable to cover the losses themselves and where the impact on the network was significant—completely different from the situation Polygon faces now. Polymarket and Binance are fully capable of covering users' losses (and have already done so). The 70.49 million POL accounts for less than 1% of POL's circulating supply, and even if the hacker sold all of it, there would be almost no substantive impact on Polygon's price, staking, gas fees, or the overall ecosystem.

But considering all factors, given the friendly relationship between Polymarket and Polygon and the influence of Binance as a major platform, Polygon may also make an exception and alter the ledger for them.

Whether Polygon will choose to "see it through" or uphold its decentralized reputation—the answer will be revealed tonight.