Axie Infinity's Ronin Network Hacked, Over $625 Million Stolen
Written with artificial intelligence.
The Ronin Network, designed for the NFT game Axie Infinity, was hacked on March 23, leading to the theft of 173,600 Ether and $25.5 million in USDC, totaling over $625 million. This incident marks the largest theft in decentralized finance history.
Overview of the Hack
On March 29, Ronin Network disclosed that it had suffered a significant security breach, resulting in the theft of a staggering $625 million worth of cryptocurrency. The hack occurred on March 23, when attackers exploited vulnerabilities in the network to transfer 173,600 Ether and 25.5 million USDC.
About Axie Infinity and Ronin Network
Axie Infinity, developed by Vietnamese studio Sky Mavis in March 2018, is an NFT-based online game where players collect and breed digital pets known as Axies. The game allows players to earn cryptocurrency by selling in-game resources and features a marketplace for virtual land and other assets, with a notable sale reaching $2.3 million last November. Although originating in Vietnam, the majority of Axie Infinity's player base is located in the Philippines.
The Ronin Network was specifically created for blockchain gaming, enabling players to exchange fiat currency for Ether or USDC, which can then be converted into a wrapped version for cheaper and faster transactions within the game. The network operates under a decentralized validation system controlled by nine nodes, with Sky Mavis managing four of them.
Details of the Security Breach
The breach was made possible when hackers gained control of the permissions of four Sky Mavis validators and one third-party validator from Axie DAO. This occurred after an agreement in November allowed Sky Mavis to sign transactions on behalf of Axie DAO, but the permission was not revoked after the agreement expired in December. Consequently, the hackers were able to authorize transactions that met the requirement of five validators.
The theft was only detected on March 29 when a user reported issues withdrawing 5,000 Ether. It was found that most of the stolen cryptocurrency remained intact in the hacker's wallet. Sky Mavis has contacted major exchanges to halt the movement of the stolen funds and is collaborating with blockchain analytics firm Chainalysis to track the assets. Additionally, the validation requirement for transactions on Ronin Network has been increased from five to eight validators, and the company has pledged to ensure user funds are recovered or compensated.