Sky Mavis, maker of the popular NFT game Axie Infinity, announced that hackers stole over 173,600 ETH and $25.5 million USD coin from its Ronin network. The theft targeted the company’s own assets and its users, which resulted to a total of around $625 million (~Php32 billion).
Without a doubt, this is one of the largest heists in the world of cryptocurrency and blockchain gaming in recent memory.
Ronin (RON) network, the blockchain that powers the backend of Axie Infinity transactions, is used by the community to move millions worth of assets every day. The game itself is estimated to be played by over 2 million gamers every month to earn money.
In a blog post, the company explained that an investigation first occurred after a user reported that it wasn’t able to withdraw 5K ETH from the Ronin bridge. When Sky Mavis digged deeper to understand the issue, it also unveiled the hacking incident that happened on March 23rd.
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The Sky Mavis Ronin network is composed of 9 validator nodes, 4 of which were taken over by hackers. In addition, a third-party validator managed by Axie DAO was also compromised. As a result, the attackers were able to get the majority of the network, which enabled them to execute any transactions at will.
To validate any deposit or withdrawal request, Ronin network needs at least 5 signatures from the validator nodes. Since the attackers controlled 5 nodes, they were able to sign and go through with the transaction of sending the assets to an external anonymous Ethereum wallet with no resistance.
The Axie Infinity developer says that they are currently in touch with security teams of major cryptocurrency exchanges and government agencies to help with the incident. While the issue is yet to be resolved, RON network deposits and withdrawals have been suspended indefinitely.
Sky Mavis promises that all the drained funds from affected players will be recovered or reimbursed. The team also guarantees that all “AXS, RON, and SLP on Ronin are safe right now.”