Largest hack of crypto!! On 23 march 2022, Ronin blockchain network was hacked, a host network to axie infinity(P2E game)
What is Ronin blockchain network?
How did Ronin blockchain got hacked?
Disclaimer: This is not an investment advice
To start with let's talk about Ronin blockchain. What is it? Why do axie infinity game chose this blockchain?
It is side-chain of Ethereum blockchain network. Axie infinity found that it would be extremely hard to attract new users and retain the existing users as the Ethereum's gas fees are expensive and the transaction speed are low. Thus, it uses the side-chain and uses the "bridge" to swap AXS or SLP token with ETh or USDC instead. It can operate independently with their own consensus algorithm with the bridge with its main network. In this case, Ronin blockchain uses proof of authority (POA)
What is Ronin proof of authority (POA)?
Proof of Authority is a consensus algorithm that rely on validator's reputation. The validators have to pass the test that shows no criminal records and can be trusted then the validators will be picked by the network to validate block. There should be limited amount of validators in order to optimise the transaction speed. In this case, there are 9 validators on Ronin blockchain. These validators have to put up reputation as their collateral.
Let now talk about the hack and how did the hacker managed to hack the network?
The hacker saw an opportunity to penetrate the weakness of the blockchain. Hacker gained control of the 4 validators and 1 axie DAO, basically an automated code that abide by the rule of the creator. With only one axie DAO, the hacker can infiltrate and direct $625 million (173,600 ETH and 25.5 USDC) into their cryptocurrency wallet.
In conclusion:
- The hacker was able to steal the axie infinity's money with the control of 4 validators and 1 axie DAO.
Q&A:
- Do you think axie infinity can recover their reputation and active users?
- As of now value of the axie infinity token is very low. Do you think you want to buy this dip?
References:
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