Maker of Axie Infinity Says It’s Time for a Redo, 3 Months After $868 Million Hack

Maker of Axie Infinity Says It’s Time for a Redo, 3 Months After $868 Million Hack
Photo: JOCA_PH, Shutterstock

NFT-based play-to-earn game Axie Infinity is back, and developers are promising on hands and knees that things will be different now. So please, hop back on your computer and grind, grind for that sweet ether.

Bloomberg first reported that Sky Mavis, the developers of Axie Infinity, confirmed they planned to re-start its Ronin Network, which was breached back in March. The company confirmed their plan to re-open the Ronin Bridge Thursday in their most recent newsletter. The update is apparently contingent on a hard fork, where the company will return to a previous version of the blockchain that will require all validators to update their software.

Axie Infinity, which has players collect and battle with Pokémon-like creatures and the potions used to breed them as NFTs. The company was on a skyward trajectory amid the coronavirus pandemic, but things came crashing down in early 2022. Over the course of six days in late March, hackers breached most of the Ronin network’s validator nodes and then siphoned off around 173,600 ether and 25.5 million USDC stablecoin, worth some $US625 (around $AU868) million in all. Developers said they didn’t notice it was happening until it was already too late.

The hack was linked to the Lazarus Group, which the FBI said was connected to the North Korean government.

A spokesperson confirmed with Bloomberg that the company will let users withdraw one Ether token for each one they lost back in March. Still, it remains to be seen how many players will take the company up on the offer, and whether it will mean some who abandoned the game will return to its hyped “play-to-earn” model. The player count was already declining even before the hack, according to Bloomberg. This is compared to the game’s 2.7 million player peak at the end of last year, most of whom were grinding away to make largely minimal returns.

After the massive breach in April, the company brought on major investors like crypto exchange Binance and the tech venture capital firm a16z to get $US150 ($208) million to reimburse user funds. The company said the rest of players’ reimbursement would come from its own resources.

The ongoing “crypto winter” has massively complicated Axie’s attempt at redemption, though. Ether is worth nowhere near as much as it had been at its peak last November, and crypto investors are stranded in the proverbial doldrums of the ongoing crash. Some analysts suggest that even the most recent rise in ether’s price could just mean more hurt down the line.

The news of Axie’s fork also coincides with the company closing the “classic” version of the game after the end of their 21st season Friday.

The company claims it conducted its own internal audit alongside several external ones to shore up its security. Sky Mavis released a security roadmap in the month after the hack that it claims has been followed through. The company replaced validators that were breached during that March hack, though the company is nowhere near their described goal of having over 100 validators. Of those current active validators not run by Sky Mavis, the rest are mostly owned by separate venture capital firms. Some crypto critics have used the examples of intrusion of big financiers into crypto as evidence that the scene is far more centralised than some evangelists still claim.