At a first glance blockchains might seem as a perfect solution in transition from the Fiat currency, creators say that thanks to encryption and carefully validated ledger, each transaction is secure. However, the next case shows that even blockchains can be hacked, you just need to know how.
Sky Mavis is a Vietnamese-based company, they are the creators of Axie Infinity an NFT game which involves Pokemon-like cards, where players go into teams and combat with their opponents. The characters are so-called “Axies” which can be customly created, sold and traded for fiat and crypto currencies. The popularity of the game is booming; only last August the player count reached 1.8 million users.
However, on Tuesday March 22nd Sky Mavis revealed that hackers were able to steal 173,600 Ethereum, which is roughly 600 million USD. The attack was focused on Sky Mavis’ blockchain “Ronin” which acts as an intermediary between the Axie Infinity and Marketplaces which allow users to change game currency into real funds. It has been revealed that hackers have utilized private security keys in order to compromise the nodes which are responsible for validating currency transfers, this allowed them to stay hidden and not raise any alarm for the security team, the loss was only discovered when another attempt to steal 5,000 Ethereum was tried to be carried out. Media already calls this event as the largest “decentralized” theft in history as of yet. Sky Mavis now has received 150 million dollars in funding in order to compensate all of the affected players and compensate them for the loss.
This case shows flaws and imperfections of the blockchain system, if it is the future of our world, then companies need to stress the importance of security to avoid situations as mentioned above to happen in the future.
Sources:
- https://www.theverge.com/2021/10/13/22725083/axie-infinity-sky-mavis-blockchain-economy-game-pokemon
- https://axie.substack.com/p/funding?s=r
- https://www.theverge.com/2022/3/29/23001620/sky-mavis-axie-infinity-ronin-blockchain-validation-defi-hack-nft
- https://www.theverge.com/2021/10/13/22725083/axie-infinity-sky-mavis-blockchain-economy-game-pokemon
I wonder what security measures the company took to avoid this kind of situation further. From what I have read there was already inflation within the game and this hack added fuel to the fire, but it is a good thing when the company takes responsibility for their actions to refund the players.