Cryptocurrencies and the blockchain technology that underlies them have captured the attention of people all over the world. Many believe that cryptocurrencies represent the future of money, and there is a great deal of excitement about the potential for this new technology. Unfortunately, as with any new technology, there are also risks associated with cryptocurrencies.
Recently, one of the most popular cryptocurrency games, Axie Infinity, was hacked, resulting in the theft of a large number of tokens, and the biggest DeFi hack ever. This post will explore what happened in the Axie Infinity hack and what it means for both the game and the wider cryptocurrency community.
Axie Infinity is a game where you can collect and trade creatures called Axies. There’s plenty of in-game currency, items that give your Axies more power to battle other players or just about anything else. And if these little guys ever get too powerful? You’ll be able to breed them through marriage which will result in new breeds with special abilities like never before. You can also put them all at 3v3 battles on lands owned by YOU. In Axis, true ownership means everything.
The game Axie Infinity has been around for a while now and it’s one of the first games to introduce play-to earn, where gamers can make real money by playing or trading assets from their account.
Sky Mavis, the blockchain asset and battle game that lets gamers play as their favorite animal character in an evolving ecosystem of other animals has been hit with a huge theft. After five validator nodes were compromised by hackers who gained access to their private keys early this week morning there was about 60 million USDT missing from Tuesday’s transactions on Ronin Bridge until they could ascertain no further funds could be stolen after realizing what happened – which is why developers have put pause onto all transaction processing while figuring out how much damage might actually need healing or replacing completely based off community feedback.
Sidechains are an innovative way to address the issue of high fees and congestion on primary blockchain networks like Bitcoin (the Lightning Network) or Ethereum. They bundle transactions from outside sources into one transaction that gets verified by nodes within both chains, achieving a degree of auditable verification without compromising decentralization otherwise required with full blockchains. Although this advantage is glaring, the current attack amplifies some of the side chains’ major issues.
Games that use the Bitcoin SV blockchain, such as CryptoFights and other future games to come out, are immune from sidechain vulnerabilities because they have enough speed for all transactions on their own. This includes gameplay data or assets in addition to any app running solely through this technology – it’ll be able handle everything with ease.
Some Ronin Network developers were criticized for not being more aware of the vulnerabilities. Axie Infinity itself had previously faced complaints from SLP token holders annoyed that they hadn’t put effort into pumping up its price- which is common in the blockchain world as well.
NFT games and DEXs
Ronin Network is a decentralized network that “unlocks hyper-growth for NFT games.” In January, it claimed 250k unique addresses and 15% of all transactions on this type or crypto in 2021 with an estimated $5 billion worth deposited into their system as well! This company includes Katana which has been one if not the most active DEXs throughout 2019 so far (and still going strong).
When hackers attack, they find an opening and then exploit it. In this case the weakness was in how Ronin chain functions as an Ethereum sidechain with nine “validator nodes” which require five signatures from different keys to complete deposits or withdrawals – but somehow one person managed get access rights for four out five official validators’ keys while also having control over another third-party set up just so he could drain funds more quickly than expected.
The developers of Ronin have found the hacker’s wallet address, which at press time appears to still hold all proceeds from this theft. Blockchain forensics firm Chainalysis is on case and working with exchanges as well as various government agencies in order track down those responsible for committing such an attack.
Two of the world’s biggest exchanges, binance and Huobi, have agreed to report any suspicious large trading; perhaps it would be useful to nabbing the fraudsters.
Vulnerabilities are inevitable whenever transactions happen off-chain, on a separate network. The size and complexity of systems may make them more susceptible to exploitation if only because there’s less people who can understand everything happening at once.
The security of the Bitcoin network has been a major concern for many years, but it appears that this problem may already be solved. BSV functions in exactly same way as BTC with increased capacity to scale; there were never any “hacks” against bitcoin itself—they all targeted poor management from third party companies managing transactions addresses
The Axie Infinity hack is a stark reminder that when it comes to cryptocurrencies, security should always be your top priority. If you are looking for a centralized exchange to keep your cryptos safe and sound, visit redot.com – one of the most secure crypto exchanges in the world. With 24/7 monitoring by our team of experts, you can rest assured that your assets will be safe and sound while you continue to participate in the exciting world of cryptocurrency.