Polygon Discloses Patched Exploit That Put 9B MATIC at Risk

“There is a natural tension between security and transparency,” Polygon’s team said in a Wednesday blog post.

Dec 29, 2021 at 9:58 p.m. UTC
Updated Dec 29, 2021 at 10:27 p.m. UTC

A hacker who helped Polygon avert a multibillion-dollar disaster in early December won a $2.2 million bug bounty, the blockchain network said Wednesday.

The so-called “white hat,” known as “Leon Spacewalker” on Twitter and GitHub, reported an exploit in a critical Polygon smart contract that held more than 9 billion MATIC tokens on Dec. 3, then worth around $20.2 billion. Core developers rushed a fix by Dec. 5.

It wasn’t fast enough to protect all the contract’s funds, according to Immunefi, the crypto security startup that managed Polygon’s bug bounty program. Separate hackers pilfered 801,601 MATIC tokens (then worth around $1.4 million) on Dec. 4. Polygon Foundation said it took the hit.

Still, the fix, a hard fork live across 90% of network validators by Block #22156660, according to Polygon’s timeline of events, protected a massive trove of funds for the Ethereum scaling tool. Polygon hadn’t publicly discussed the reasoning for the hard fork before Wednesday.

Consulting the record

CoinDesk reviewed the Polygon Discord server’s validator channel on Dec. 5. It contained multiple validators expressing anger over the core developers’ silence on pushing what is usually a major and well-publicized software upgrade through the shadows.

Indeed, the abrupt hard fork had spillover effects for the network as validators unprepared for the shift were knocked offline, according to the Discord logs.

Polygon’s developers acknowledged on Wednesday their initial silence created a precarious position. “There is a natural tension between security and transparency,” the team said in its blog post. They said a “minimal” initial disclosure followed the Ethereum community’s “silent patch” standard.

“What’s important is that this was a test of our network’s resilience as well as our ability to act decisively under pressure,” co-founder Jaynti Kanani said in a blog post. “Considering how much was at stake, I believe our team has made the best decisions possible given the circumstances.”

Polygon’s bug bounty program awarded Leon Spacewalker $2.2 million in stablecoins; a different white hat who reported the same bug after the initial thefts won 500,000 MATIC.

Spacewalker didn’t respond to CoinDesk by press time.

DISCLOSURE

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Danny is CoinDesk's deputy business editor. He owns BTC, ETH and SOL.