Axie Infinity NFT Game Sees $600 Million Loss Due to Security Breach

When it comes to NFT gaming, Axie Infinity is easily one of the biggest success stories that come to mind. Started in 2018 as a basic Pokemon-style collecting game, it has grossed over $4 billion in sales and saw over 1.8 million daily active users in August last year. The game is very popular in the Philippines, where the play-to-earn model allows people to play the game as a full-time job, which is not new in popular MMOs.

But, as with every success story, the fame has brought with it unwanted attention as well. Today, one of the blockchains assigned with handling the transactions for Axie Infinity reported a security breach that resulted in a loss of around $600 million in cryptocurrency.

Ronin, one of the two blockchains that powers Axie Infinity’s NFT-based economy, stated,

Earlier today, we discovered that on March 23rd, Sky Mavis’s Ronin validator nodes and Axie DAO validator nodes were compromised, resulting in 173,600 Ethereum and 25.5M USDC drained from the Ronin bridge in two transactions. The attacker used hacked private keys in order to forge fake withdrawals.

Ronin

Since these withdrawals were made on the blockchain, people can still view the crypto wallet where the funds were allegedly transferred. Ronin is now working with law enforcement to get back the stolen funds.

The irony is that the hack would not have been possible without Axie Infinity’s massive success. Last year, developer Sky Mavis faced issues when more transaction requests were being made than the game could handle. Sky Mavis asked Ronin if it could authorize the transaction on its own behalf to speed up transaction time. Ronin agreed to grant these privileges temporarily, and the company thought they had withdrawn them in December 2021. However, it turns out that one of Ronin’s verification nodes still recognized that special allowance.

The alleged hacker utilized this node to obtain access to most of Ronin’s validators, letting them do whatever they wanted with the crypto network. It’s a little surprising that they went after the money.

This is not the first major heist in the cryptocurrency market, and authorities are getting much better at tracking down the perpetrators. One of the largest heists in crypto history was recently brought to an end after the US Department of Justice reported billions in Bitcoins had been recovered from two alleged cybercriminals.

About Axie Infinity

Axie Infinity is an NFT-based online video game developed by Vietnamese studio Sky Mavis, which uses Ethereum-based cryptocurrencies, Axie Infinity Shards (AXS) and Smooth Love Potion (SLP).

Axie Infinity is a trading and battling game that allows players to collect, breed, raise, battle, and trade creatures known as “Axies.” The game uses a “pay-to-play-to-earn” model where participants can earn a token which is traded on a crypto exchange as an Ethereum-based cryptocurrency. Players can also exchange in-game assets as NFTs. Axie Infinity allows users to cash-out their tokens every two weeks.