Cyberattack: Hacker from Ronin Network loses over $600m

Ethereum-linked sidechain, Ronin developed by Axie Infinity creator Sky Mavis yesterday’s blog post, revealed that there had been a major security breach. According to Ronin’s manager, the cybercriminals attacked his platform on March 23 and stole around 173,600 Ethereum. The perpetrators of the robbery fled but have so far not been captured.

The project suffered losses of $625million (173,600 Ethereum tokens, 25.5 million USDC tokens), and could be the most severe decentralized cyberattack on finance (hack) ever. It surpasses the $611 Poly Network hack that occurred in August 2021.

Background

Axie is an NFT-based video game that rewards players. It runs on Ethereum like most blockchain-based video games. To reduce transaction fees, the game uses Ronin as a sidechain. Transaction fees are a problem with Ethereum.

To get rid of the issues bugging the Ethereum blockchain from affecting Axie’s gameplay, the game developers unveiled the Ronin blockchain. According to developers, Ronin is a sidechain designed specifically for Axie Infinity.

The wallet Ronin wallet was built on the Ronin blockchain and is available for Axie Infinity users. It is a browser extension wallet, just like MetaMask or other wallets.

Ronin Bridge is where players of the Axie Infinity can transfer their Ethereum to Ronin. Once the ETH is transferred to Ronin via the bridge, it becomes Wrapped ETH. Users can use the bridge to buy Axies in order to play the game. The bridge can be used to withdraw tokens or transfer them back to Ethereum.

How did the hack happen?

Cyberattacks were made on Ronin Bridge. This exposed Axie Infinity players and other projects that use the Bridge.

A set of nine secret keys protects the Ronin Bridge’s funds. Access to at least five keys is required to unlock and release funds.

The hacker discovered a backdoor in Ronin Bridge and obtained four validators on Ronin including a third-party validator that was run by the Hacker. Axie DAO. The hacker gained access to the vault with five validators and drew 173,600 Ether. The attacker “used hacked private keys to forge fake withdrawals” from the Ronin bridge contract in two transactions.

The hacker took 173,600 Ethereum and 25.5 Million USDC, which was worth more than $620million at the time this article was written. Around 6,250 ether, or $21 million, has since been moved out of the attacker’s wallet address, including several ETH transferred to FTX according to exchange Etherscan.

The Ronin Network posted a public notice about the event six days after the hack, disclosing that they already knew about the hack on the same day – a user reported his inability to withdraw 5K ETH from their Bridge.

The company stated that they will increase the threshold for validators from five to eight. Ronin will temporarily suspend the Ronin Bridge in order to prevent any further attack vectors from remaining open. They are also migrating their nodes and will seperate from their existing infrastructure.

Since 2021, the number of cyber-attacks on crypto currencies and theft has increased. The third quarter of 2021 saw an increase in crypto cyberattacks and theft. the DeFi company, Poly Network, lost over $600 million. The Asian crypto company was founded in 2018. Coincheck, suffered a theft of more than $500 million however, the criminals did not reimburse them.

Market effect

$AXS, $RON and $SLP all stocks fell on the news. The most hurt was $RON, it’s not surprising. At press time, it is down 20.49%. According to data from, $AXS, $SLP and $SLP were also affected. They are down 7.12% & 8.59%, respectively, in the last 24 hour. Coinmarketcap.

The occurrence seems to be a major blow for the crypto community. Blockchain system vulnerabilities could have negative effects on trust and credibility in the revolutionary technology. It is even more appalling that it took Ronin company a week to publish their “Community alert”. They also removed the comment function from their announcement.

This hack is unlikely to cause a major market crash. Due to increasing institutional adoption and corporate bodies, the crypto market has become more mature than ever.

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