Bybit Study: 16 Blockchains Have Protocol‑Level Fund Freezing Capabilities

CN
3 hours ago

A recent study by Bybit reveals that 16 blockchains currently have protocol‑level freezing capabilities, allowing foundations or governance groups to block specific addresses. An additional 19 blockchains could potentially support freezing in the future.

The research identified three distinct methods of freezing funds: hardcoded freezing, config file–based freezing, and on‑chain smart contract freezing. Five protocols— BNB Chain, Chiliz, XDC, Viction (VIC), and Vechain—were found to use hardcoded freezing. Vechain first implemented this after the December 2019 hack, which saw $6.6 million worth of VET tokens stolen.

BNB Chain followed in 2022 after a cross‑chain bridge exploit allowed attackers to mint 2 million BNB tokens. In both cases, freezing was used to prevent stolen funds from being moved. The Bybit research report notes that the main advantage of freezing is the rapid mitigation of financial damage.

“The primary advantage of a freezing ability is the swift remediation of financial damage to an ecosystem. This is achieved by preventing attackers from moving or liquidating stolen assets by validators and foundation team,” the study report states.

According to the report, ten blockchains employ a config file–based method, essentially a private blacklist managed in local configuration files accessible only to validators and core developers. Following a major hack in May, Cetus used this approach by adding attacker addresses to its configuration files and restarting nodes, effectively blocking those addresses from signing transactions. Only one blockchain, HECO, was found to use the on‑chain smart contract freezing method.

Read more: Cetus Protocol’s $223 Million Hack Puts Sui’s Decentralization in the Spotlight

The study acknowledges that these practices have sparked debate over decentralization. Critics argue such measures compromise the ethos of blockchain, while supporters highlight the tens of millions of dollars in recovered assets as proof of their necessity.

  • Which blockchains can freeze funds? Bybit found 16 blockchains with protocol‑level freezing, and 19 more may add it.
  • What methods are used? Hardcoded freezing, config file blacklists, and on‑chain smart contract freezing are identified.
  • Why is freezing important globally? It helps ecosystems quickly stop attackers from moving or liquidating stolen digital assets.
  • What debate does this raise? Critics see freezing as centralization, while supporters cite millions in recovered funds worldwide.

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