In a surprising development, Polygon has proposed a major network upgrade to recover approximately 70.49 million POL tokens, worth around $6.5 million. These were those tokens that were stolen during two separate security incidents involving Polymarket and Binance in October 2026.
The proposal aims to move the stolen tokens from five attacker-controlled wallets into recovery wallets designated by the compromised companies.
Remarking on which the team noted,
5 attacker-controlled addresses hold about 70.49M POL: about 23.86M POL (4 addresses) from the Polymarket incident and about 46.63M POL (1 address) from the Binance incident. The funds cannot move, but nothing in the current setup lets them be returned either.
Things Polygon needs to do
Polygon’s block producers have already added these addresses to their transaction blocklists. This they did to prevent the attackers from moving the funds further. However, this measure only freezes the assets, and it does not return them to their actual owners.
The existing system also requires block producers to restart their infrastructure whenever blocklist changes are made, making it difficult to maintain these restrictions over time.
Hence, to address this issue, Polygon has proposed a hard fork, which is a major network upgrade that changes the blockchain’s underlying rules.
Under the proposal, at a predetermined block, the POL balances of the five identified wallets would be reduced to zero. The same amounts would then be credited to recovery addresses verified and designated by Polymarket and Binance.
However, for this plan to succeed, the proposal also requires both companies to prove ownership of their designated recovery addresses before the upgrade. If approved, developers will first implement and test the changes on Polygon’s Amoy testnet before deploying them on mainnet.
At the same time, validators, exchanges, and node operators will also need to upgrade their software before activation.
However, the proposal has raised important questions about decentralization and user ownership.
The red flag in question
Normally, blockchain transactions cannot be reversed or wallet balances moved without the owner’s private keys. But Polygon’s proposed intervention would override this principle through a consensus-level change.
However, the network argued,
It is an extreme action that should not be reproduced commonly.
This comes as the Polygon’s MATIC was trading at $0.098 after a hike of 2.08% in the past 24 hours.
But with 21Shares recently withdrawing approximately $11 million worth of POL from Coinbase over the past 30 days, including 45.7 million POL worth $4.08 million on 28th October, concerns remain.
Final Summary
- As of now, Polygon’s block producers have already added these addresses to their transaction blocklists.
- But at the same time, the proposal has also raised important questions about decentralization and user ownership.
