Axie Infinity Delays Ethereum NFT Gaming Upgrade After $622M Hack

Axie Infinity Delays Ethereum NFT Gaming Upgrade After 2M Hack

In short

  • The Axie Infinity ecosystem suffered a security breach last week, with more than $600 million worth of crypto assets stolen.
  • Now the developers have delayed an upgraded version of the game after the attack.

Earlier this week, Axie Infinity developer Sky Mavis revealed that its The Ronin Network sidechain had been hackedwith around $622 million worth of crypto funds drained from the bridge connecting Ronin to Ethereum. Now the security breach has caused the creators to postpone a long-awaited game overhaul in order to make money.

Axie Infinity: Origin, a significantly upgraded version of NFT-powered monster fighting game, was scheduled to launch today as an alpha version. However, due to the fallout from the exploit, which took place on March 23 but was discovered and announced earlier this week, the Origin launch has been delayed a week to April 7.

“While the game is ready for soft launch, we have decided to give the engineering and security team an additional window of time to thoroughly investigate all implications of the breach, before requesting their full attention to support Origin’s release,” reading a post from Sky Mavis.

On Tuesday, Sky Mavis revealed that a hacker had tapped 173,600 ETH and 25.5 million USDC stablecoins from the bridge connecting his own Ronin side chain to Ethereum. At the time of the announcement, these cryptocurrencies were worth around $622 million.

However, the attack itself took place on 23 March – and it went unnoticed for several days. Sky Mavis said on Tuesday that there was a problem when someone tried to withdraw 5,000 ETH of their own funds from Ronin and was unable to do so.

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According to the developer, the exploit was carried out when someone used “hacked private keys” to take control of five of the nine validators that sign transactions on the Ronin network. Sky Mavis temporarily shut down the bridge and Katana decentralized exchange (DEX) when the attack was detected, to mitigate any further exploits.

The studio promised to “ensure that all funds are recovered or refunded,” and is working with law enforcement, crypto-forensic firm Chainalysis and its investors to figure out next steps.

Sky Mavis also said that any funds still left on Ronin are currently safe. Since some funds have been transferred from the attacker’s wallet to centralized exchanges, co-founder Jeff Zirlin has said at NFT LA Tuesday that “there is a chance that they may be identified and brought to justice.”

The Ronin attack ranks as the second biggest DeFi hack of all timebased on the value of the stolen funds at the time of exploitation ($552 million), after only $611 million Poly Network hack from August 2021. In that case, most of the funds were returned by the hacker, who suggested that it was all designed to teach Poly Network a lesson about lax security.

Axie Infinity: Origin is billed as a robust upgrade to the current experience, where players purchase and battle monsters sold as unique NFT collectibles. Origin is revamping the battle system with richer graphics and more strategic gameplay, the developer has said.

It also marks addition of free-to-play elements, which allows users to play with “starter” monsters without first buying NFTs. Origin will launch as a separate game client from the original Axie Infinity experience, but it will use the exact same NFTs. The alpha version of Origin will not provide token rewards, as Sky Mavis announced in February.

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Axie Infinity is the most successful game to date in the crypto space, bringing in millions of players and generating more than 4 billion dollars worth of NFT trading volume. However, the game is games to earn the economy has suffered in recent months as Axie’s token values, NFT prices and trading volume have all dropped significantly, leading to various adjustments to the reward model.

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