Top-tier Trading Bot Polycule on Polymarket has been attacked. How should prediction market projects improve security measures?

null 1. Event Summary

On January 13, 2026, Polycule officially confirmed that its Telegram trading bot was hacked, resulting in the theft of approximately $230,000 worth of user funds. The team quickly updated on X: the bot was taken offline immediately, a patch was rapidly developed and deployed, and affected users on Polygon will be compensated. Multiple notices from last night to today have kept the security discussion around Telegram trading bots heated.

2. How Polycule Operates

Polycule’s positioning is clear: enabling users to browse markets, manage positions, and handle funds on Polymarket directly within Telegram. The main modules include:

Account Creation and Dashboard: /start automatically assigns a Polygon wallet and displays the balance; /home and /help provide access and command instructions.

Market Data and Trading: /trending, /search, or pasting a Polymarket URL fetch market details; the bot offers market orders (market/limit), order cancellations, and chart viewing.

Wallet and Funds: /wallet supports viewing assets, withdrawing funds, POL/USDC swaps, and exporting private keys; /fund guides deposit procedures.

Cross-Chain Bridge: Deep integration with deBridge helps users bridge assets from Solana, with a default deduction of 2% SOL to be exchanged for POL to pay Gas fees.

Advanced Features: /copytrade opens the copy trading interface, allowing follow-on trades by percentage, fixed amount, or custom rules; it also supports pause, reverse copy, and strategy sharing.

The Polycule Trading Bot interacts with users, parses commands, manages keys in the backend, signs transactions, and continuously listens for on-chain events.

After users input /start, the backend automatically generates a Polygon wallet and secures the private key. Users can then send commands like /buy, /sell, /positions to check balances, place orders, and manage positions. The bot can also parse Polymarket web links to directly provide trading access. Cross-chain funds are managed via deBridge, supporting SOL bridging to Polygon, with a default 2% SOL swap for POL to cover Gas. More advanced features like Copy Trading, limit orders, and automatic monitoring of target wallets require a server to stay online long-term and to sign transactions on behalf of users.

3. Common Risks of Telegram Trading Bots

Behind the convenience of chat-based interaction are several security vulnerabilities that are difficult to mitigate:

First, nearly all bots store user private keys on their servers, signing transactions on behalf of users. This means that if the server is compromised or data leaks due to operational errors, attackers can export private keys in bulk and drain all user funds at once. Second, authentication relies on the Telegram account itself; if a user experiences SIM swapping or device loss, attackers can control the bot account without needing mnemonic phrases. Lastly, there is no local popup confirmation—traditional wallets require user confirmation for each transaction, but in bot mode, any logical flaw in the backend could automatically transfer funds without user awareness.

4. Specific Attack Surfaces Revealed by Polycule Documentation

Based on the documentation, the current incident and future potential risks mainly focus on the following points:

Private Key Export Interface: The /wallet menu allows users to export private keys, indicating that the backend stores reversible key data. If there are SQL injections, unauthorized access points, or log leaks, attackers could invoke the export function directly, which aligns closely with the theft scenario.

URL Parsing Potentially Triggering SSRF: The bot encourages users to submit Polymarket links to fetch market data. If input validation is insufficient, attackers could forge links pointing to internal networks or cloud metadata services, causing the backend to “fall into traps” and further steal credentials or configurations.

Copy Trading Monitoring Logic: Copy trading involves the bot following target wallets’ operations. If the event listening can be spoofed or lacks security filtering, followers could be led into malicious contracts, with funds locked or stolen directly.

Cross-Chain and Auto Swap Processes: The automatic swapping of 2% SOL to POL involves exchange rates, slippage, oracles, and execution permissions. If these parameters are not rigorously validated, hackers could amplify swap losses during bridging or transfer Gas budgets. Additionally, inadequate validation of deBridge receipts could lead to fake deposits or double entries.

5. Reminders for Project Teams and Users

Project teams should consider: delivering a comprehensive, transparent technical review before service restoration; conducting specialized audits on key areas like key storage, permission isolation, and input validation; re-evaluating server access controls and deployment processes; and introducing secondary confirmation or limit mechanisms for critical operations to reduce damage.

End users should consider limiting the funds kept in the bot, promptly withdrawing profits, and enabling Telegram’s two-factor authentication and independent device management for added security. Until the project provides clear security commitments, it’s advisable to observe and avoid adding more principal.

6. Postscript

The Polycule incident reminds us that when trading experiences are compressed into a chat command, security measures must also be upgraded accordingly. Telegram trading bots will remain a popular gateway for prediction markets and Meme coins in the short term, but this space will continue to be a hunting ground for attackers. We recommend project teams treat security as part of product development and openly share progress with users; users should stay vigilant and not treat chat shortcuts as risk-free asset managers.

We at ExVul Security focus long-term on the offensive and defensive research of trading bots and on-chain infrastructure. We offer security audits, penetration testing, and emergency response services for Telegram trading bots. If your project is in development or launching, feel free to contact us to eliminate potential risks before deployment.

About Us ExVul

ExVul is a Web3 security company providing smart contract auditing, blockchain protocol audits, wallet security, Web3 penetration testing, security consulting, and planning. Committed to enhancing the overall security of the Web3 ecosystem, ExVul remains at the forefront of Web3 security research.