- Sixteen blockchains have built-in fund freezing features, while 19 more can add this with small protocol changes.
- Three types of freezing methods were found: hardcoded public blacklists, config file-based private blacklists, and on-chain smart contracts.
- Binance’s BNB Chain and VeChain are among those using hardcoded freezing, and Harmony ONE and Sui use config file-based freezing.
- Freezing mechanisms challenge claims of full decentralization and transparency in blockchains, says Bybit’s report.
- Transparency about freezing capabilities is urged to improve blockchain governance and community understanding.
A report from Bybit’s Lazarus Security Lab examined 166 blockchains to identify those with the ability to freeze funds. The study found 16 blockchains that already have built-in freezing measures and 19 others that could implement similar mechanisms with minor technical updates. This raises questions about how decentralized and transparent the blockchain networks really are.
The research identified three freezing methods: hardcoded public blacklists, config file-based freezing using private blacklists stored locally, and blacklists enforced through on-chain smart contracts. Chains like BNB Chain, Chiliz, and VeChain use hardcoded blacklists. Config file-based freezing is common among blockchains such as Harmony ONE, HAVAH, EOS Network, and Sui. Only the Huobi Eco Chain (HEC) uses on-chain smart contracts to enforce freezing.
The report highlights recent cases where these freezing features have been used. For example, BNB Chain froze funds after a $570 million bridge hack, while VeChain blocked assets following a $6.6 million compromise. Likewise, Sui froze $162 million related to the Cetus hack. Additionally, 19 other blockchains, including Arbitrum, Cosmos, Sei, and THORChain, could adopt freezing with some protocol adjustments.
Bybit argues that many blockchain projects do not publicly disclose their freezing abilities, affecting perceptions of decentralization. The report states, “The presence of these mechanisms fundamentally challenges the foundational principles of a decentralized ecosystem and necessitates further discourse within the blockchain community, but it has prevented Hackers from stealing funds.” It calls for greater openness on freezing tools as part of good blockchain governance.
Industry voices note that any blockchain can apply freezing, but the key factor is the level of decentralization and whether validators or miners approve such changes. In contrast, blockchains like Bitcoin have strong community opposition to freezing proposals. Security firms have reported some freezing methods can be bypassed, as seen when a Hacker moved $3 million from a frozen address on the Sonic chain by targeting tokens not covered by the freeze.
For the full Bybit report, see here. Additional commentary on freezing methods is available from Armin Reiter and security analysis from GoPlus Security.
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