The Ronin blockchain, developed by Sky Mavis, the team behind Axie Infinity got hacked and around $625 million were stolen, making it the biggest hack in DeFi history. What happened and what does it mean for RON holders and Axie Infinity players?
The hack was announced on March 29th on the official Ronin Network twitter account. The team released an announcement stating that Ronin Validators were compromised and giving some details on what happened.
It is the Ronin bridge that got exploited and the amount of funds stolen is 173,600 ETH and 25.5M USDC. The team discovered that the attack started on March 23rd and that the Sky Mavis’ and Axie DAO were compromised. The attacker used hacked private keys to make two huge fake withdrawals. The team only noticed the issue after being alerted by a user who was unable to make a 5k ETH withdrawal from the bridge.
The Ronin chain currently only consists of 9 validator nodes. The hacker managed to access Sky Mavis’ four validators and a third party validator run by Axie DAO. By controlling five out of 9 validators, the attacker was able to send and approve deposit and withdrawal events.
Some community members are being vocal about the time it took the team to realize that they were hacked. Warning signs were there and shared since March 26th, but no immediate actions were taken.
The team decided to shut down the bridge and the Katana Dex immediately. The team is working with law enforcement officials and forensic cryptographers to try to recover the stolen funds.
It seems like the hacker(s) transferred some of the stolen crypto to FTX. You can see the identified wallet transactions on Etherscan. Not a smart move from the hacker as the funds can be easily blocked by the exchange and the hacker could be easily identified, especially if the account is KYCed.
Centralized exchanges like FTX, Huobi and Binance already stated that they will do whatever they can to help the Ronin and Axie Infinity team.
What does it mean for Ronin and Axie Infinity players and holders?
The first consequence of the hack is a quick drop in the $RON, $AXS and $SLP token price. As soon as the news broke, the dump started. At the time of writing we do not know the current situation and if the exploit is still active.
The timing couldn’t be worst for the Sky Mavis team who were set to release the biggest Axie Infinity update, Axie Origin. Many were expecting a good run for the $AXS, $SLP and $RON tokens, especially with the good current market conditions.
Until we know more about the exploit and if the team managed to prevent similar attacks, we advice our readers to be cautious and protect their investment. But as we know, these hacks can also be an opportunity. Token prices will drop, and some will certainly take advantage of these cheap entries. As always, this is not financial advice and we recommend everyone out there to do their own research.