Axie Infinity hack leaves players shaken – but still loyal
When Logan Evans found out that Axie Infinity – a popular online game where players can earn cryptocurrency – was the victim of one of the biggest digital heists of all time, he worried that he had lost everything.
“My first reaction was ‘holy s—, is my money gone? Did I just buy all these cute little Pokémon for nothing?'” Evans, 24, told NBC News.
Evans has spent the past eight months building his squad of Axies, animated monsters that many (including Evans) liken to the popular Nintendo Pokémon series, where players pit candy-colored monsters against each other. But what may sound like a relatively simple game has emerged as one of the most popular and lucrative of the so-called play-to-earn games. Axie Infinity’s website boasts that the marketplace has facilitated $3.6 billion in transactions, and the game has drawn in around 2 million users per day.
But that economy was rocked in late March when unidentified hackers managed to steal about $625 million worth of assets from a subsidiary of Vietnamese game studio Sky Mavis, the company that operates Axie Infinity. The company promised to refund lost funds, and Sky Mavis said on Wednesday it had raised $150 million from investors to repay the players.
Although Evans has not directly lost money as a result of the hack (he still has the same amount of in-game currency as he did before the breach), he and other players cannot withdraw cryptocurrency from the game while Axie Infinity and law enforcement investigate the hack and determine that the network is stable.
Evans said he was frustrated by what he saw as a slow response from the company, which only acknowledged the breach six days after the theft.
“I think that’s the worst part,” said Evans, who lives in Missouri. “The negligence of not hearing about it for six whole days.”
Axie Infinity is one of a growing number of monetization games that use blockchain technology to create a system that can track and reward players. These games have been touted by some crypto advocates as the future of online gaming, giving players a stake in the success of the games they play.
But the complexities of the costs, benefits and risks of decentralized blockchain technologies – and especially the centralized platforms built on top of them – have become apparent in the past year thanks to a series of high-profile hacks.
Axie Infinity’s trouble started when it created its own blockchain, the Ronin Network, to avoid the expensive transaction fees that would have come from using Ethereum, the most popular blockchain for monetizing games.
Having its own blockchain allowed the company to create a digital token, which was then backed by ether, the cryptocurrency of the Ethereum blockchain. These two currencies are connected by what is known as a cross-chain bridge, which allows users to exchange ether for Axie Infinity’s digital tokens and vice versa.
The risk of a hack “grows exponentially” the moment cryptoassets are traded from a secure blockchain like Ethereum and poured into a cross-chain bridge like Axie Infinity’s Ronin network, said Max Galka, CEO of blockchain and crypto-forensics firm Elementus. In Axie Infinity’s case, hackers managed to break into the company’s system by compromising Ronin. The hackers were then able to transfer ether and another digital currency out of the company’s accounts.
Sky Mavis did not respond to NBC News’ request for comment.
As for Axie Infinity’s future after succumbing to the hack, Galka said it was constantly surprising to see “how resilient this ecosystem is to events like this.
“Historically, hacks, as big as they can be, haven’t really scared people,” he said.
Axie Infinity players who spoke to NBC News confirmed that they are not ready to give up on the game just yet.
Ansel Gravelle is among a group of Axie “leaders” who have set up the equivalent of a small business on the platform, complete with a network of players – or “scholars” – who use their digital assets to play Axie Infinity and other games. to earn games. It’s a win-win situation for those who can’t afford to play Axie Infinity, which requires users to purchase three non-fungible token (NFT) creatures known as Axies; they start at around $16, but it’s not uncommon for players to spend upwards of $1,000 to build a team.
News of the hack surprised Gravelle, 24, but he said he can “see the bigger picture” and doesn’t feel a sense of fear or panic.
“I think it’s one of those things that shows we’re new and early in this space,” Gravelle said. “I have no intention of selling anything. If anything, I’m going to wait and see what kind of fall this fear brings…and try to capitalize on maybe some lower asset prices.”
Gravelle’s faith may be rewarded, as Axie Infinity has promised to make players whole. He currently helps run a network of around 1,300 players, most of whom play from the Philippines, Brazil and across Africa, with whom he shares profits.
Players earn “Smooth Love Potion,” or SLP, tokens as a reward for playing, which can then be sold for cryptocurrency. The value of these tokens relative to ether has crashed in recent months, meaning players are now earning much less than they used to.
“They’re really like employees. They can play and make some money,” Gravelle said. “You just play a couple of hours a day and if you make $10 you keep $6 and I keep $4. That’s how it works.”
It’s become a lucrative business model, Gravelle said, allowing him to make more money than he did from his six-figure consulting job last year.
Even casual players are still engaged in the game. Akhil Jindal, 29, who started playing Axie Infinity in June last year, said the game and its community were still big draws, but the hack offered a warning.
“The community is very strong and with their continued support, Axie will continue to be successful,” Jindal said. “But nonetheless, there are really important lessons to be learned in decentralization and security.”
Both Jindal and Evans said they had not lost faith in Axie Infinity or its creators, and had no plans to give up on the game anytime soon.
“I still trust Axie Infinity,” Evans said. “I still love everything about this place.”