March 23 of 2022 was a date that marked a before and after for the whole Axie Infinity ecosystem, and it was not only a disaster for the development team at Sky Mavis, but it also turned heads on the whole NFT and crypto sphere, as it was the moment one of the biggest crypto heists in history occurred, having hackers gaining control of 5 of the 9 validator nodes required to permit transactions, conducting a series of fake withdrawals and stealing a total of 173,600 Ethereum and 25.5 million USD Coin, worth about 625 million dollars back then.
The people performing the attack allegedly used stolen private keys to take control of these validator nodes in the network, and it was later revealed to be the North Korean cybercrime organization known as the “Lazarus Group”, the same conglomerate involved in the “WannaCry ransomware cyberattack of 2017.
This led to the closing of the Ronin bridge with the Ethereum blockchain, having users unable to withdraw their funds while a solution to restocking liquidity and recouping the stolen crypto was being found.
The hack put the whole Crypto community in an even worse light to the regular public, which already sees cryptocurrencies and NFTs as an extremely volatile ecosystem, prone to scams and fraud.
To make matters worse, the announcement of the hack came on March 30th, a week after the heist was performed, leaving supporters of the game feeling betrayed by the lack of security on Sky Mavis's part.
It’s not just doom and gloom, as this incident might have been an eye-opening experience, not only for investors and supporters of the NFT-based game but also for the company behind its development, being this a close call that not any project would have survived.
Earlier this week, a notice was sent on Ronin’s official Twitter, further sharing information about the result of the audits performed in retaliation to the security mishaps in their former bridge:
“We are happy to report that the Certik audit came back clean with minor suggestions. We are implementing Certik’s improvement recommendations and will begin to deploy the validator Governance Smart Contract. The Ronin Bridge is still on track for a re-opening this month.”
Sky Mavis later announced the exact day for the reopening of the Ronin bridge to be on June 28th. This came together with the notice of the release of Land Staking this week and the reassurance that the user funds are now fully backed by the bridge in a 1-to-1 manner.
The Vietnamese game studio also raised 150 million dollars beforehand, in a funding round led by Binance itself, the crypto exchange most closely involved with Axie Infinity and the only of its size to integrate directly with the Ronin network, allowing users to move funds from its platform to Ronin wallet addresses and vice versa.
These 150 million were destined to help reimburse the users being hindered by the hack, and other big names were also involved in the funding, such as Animoca Brands, a16z, Dialectic, Paradigm, and Accel, aside from Binance.
All in all, from a positive point of view, this could be seen as a proof of the resilience of the project, since a loss of this magnitude would have been devastating to a project without the backing and involvement Sky Mavis has with big names in the blockchain sphere, but nevertheless, a lot of users have decided to move away and liquidate their assets, as the uncertainty of the situation together with the bear market we are currently experiencing, which is already taking a big chunk of their investments, left them fearing for future incidents and disrupted the trust they had in the future of the Axie ecosystem.
Isaac Vitales