After a $622M Hack, Axie Infinity's Ethereum Bridge Is Back Online

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After a $622M Hack, Axie Infinity’s Ethereum Bridge Is Back Online

After a $622M Hack, Axie Infinity's Ethereum Bridge Is Back Online
Image: Axie Infinity
Source: Decrypt
1656497678 29 Jun / 10:14

In March, Axie Infinity, the most successful NFT-based video game in terms of overall trade volume, was the victim of one of the largest DeFi hacks in history. The exploited connection between the game's sidechain and Ethereum has been repaired.

Today, Axie Infinity creator Sky Mavis reported that the Ronin bridge is back up, over three months to the day after the company revealed the breach. The Ronin network is currently accepting deposits and withdrawals from users.

The bridge, which allows users to move assets between the Ronin sidechain and Ethereum's mainnet, was compromised on March 23, resulting in the theft of 173,600 ETH and 25.5 million USDC stablecoin.

Collectively, the value of the assets was around $552 million at the time of the assault and $622 million when Sky Mavis disclosed the vulnerability on March 29. (These assets are currently valued at around $232 million due to a broader market fall in cryptocurrencies.)

In April, the United States Treasury linked the Ronin bridge assault to the notorious Lazarus Outfit, a North Korean government-sponsored cyber group. Lazarus was previously linked to the WannaCry ransomware assault of 2017 and the Sony Pictures hack of 2014.

Sky Mavis revealed intentions to restart the Ronin bridge last week, admitting that a hard network fork would be necessary to restore functioning. In other words, all validators for Ronin were required to upgrade their software to permit the restart. In addition to an internal audit, Verichains and Certik conducted external code audits.

Sky Mavis announced that users of Ronin whose monies were taken in the incident had been reimbursed. “All users have been compensated in full,” the company noted in a blog post today.

According to the statement, 56,000 ETH belongs to the Axie DAO or decentralized autonomous organization. This community money will remain unaccounted for as Sky Mavis collaborates with legal police to reclaim these assets. If the monies are not recovered within two years, the Axie DAO will vote on the disposition of its bank account.

Additional 46,000 ETH were removed from Ronin using a different bridge that the Binance cryptocurrency exchange created in April. Sky Mavis has returned 117,600 ETH and 25.5 million USDC to impacted consumers, with a current value of around $165 million.

Sky Mavis raised an extra $150 million in April to assist in the aftermath of the Ronin bridge assault. Binance led the round alongside Andreessen Horowitz and others.

The designer of Axie Infinity acknowledged that the Ronin bridge was susceptible owing to inadequate decentralization since the company controlled approximately half of the validators that validated transactions. Ultimately, the attacker gained access to five of the nine validators using “hacked private keys,” according to the company, and signed transactions to steal cash.

Sky Mavis intended to integrate more community validators for Ronin, and investor Animoca Brands intended to manage one. Additionally, the studio stated in today’s article that it had incorporated a “circuit breaker” feature that adds human control to large-scale transactions and a daily withdrawal restriction for the Ronin bridge.

Aside from the March breach, Axie Infinity has lost considerable momentum since late 2021, with NFT trade volume and game token values plummeting.

The play-to-earn game has experienced less than $3.5 million in NFT trading over the previous 30 days. According to statistics from CryptoSlam, less than a year after reaching a monthly record of $848 million in August 2017. The AXS governance token has fallen 91 percent from its all-time high, while the SLP reward token has fallen 99 percent from its record price.

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