Three months after a devastating hack that drained more than $600 million worth of assets from leading blockchain game Axie Infinity’s token bridge, the team behind Axie, Sky Mavis, has announced that the Ronin Bridge is back online.
On March 30, DappRadar reported that around 170,000 ETH and 25 million USDC had been drained from the Ronin bridge after hackers managed to gain access to private validator keys. The hack was worth more than $620 million at that time.
The Ronin Bridge was developed by Axie’s creators Sky Mavis to circumnavigate Ethereum gas fees and provide players with a cheaper and smoother gaming experience. It enables users to transfer assets between the Ronin sidechain and the Ethereum mainnet. The bigger picture however is for Ronin to become the industry standard for blockchain gaming and consumer applications.
Rebuilding bridge to Axie Infinity
According to an announcement from Sky Mavis on Tuesday, June 28, the Ronin bridge is back online after three audits. One internal and two external audits by Verichains and Certik. Notably, the team states they are on track for land staking to go live this week. Additionally, a new design and full settlement for users’ stolen assets were rolled out as well.
So far, Sky Mavis has refunded around 120,000 ETH and 25 million USDC by providing the liquidity to back users’ wETH (wrapped ether) on Ronin. Immediately after the hack occurred, around 46,000 of that ETH was reimbursed by Binance, as they stepped in to provide a bridge to its exchange that let users swap wETH for ETH.
Binance also led a $150 million funding round to assist Sky Mavis in repaying Axie Infinity users. Notably, the remaining 56,000 stolen ETH belongs to the Axie DAO Treasury and will remain uncollateralized as Sky Mavis works alongside law enforcement to recover the funds.
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More decentralization for Axie Infinity
The original hack was made possible because Ronin Bridge had only nine validator nodes, with Sky Mavis employees controlling four of those. In a postmortem document, the team admitted that a lack of decentralization had led to the Ronin Bridge being vulnerable to a hack.
When DappRadar originally covered the story, Sky Mavis made it clear that they quickly wanted to increase the number of validators to 11, then achieve 21 by July, and scale to more than 100 by the end of 2022. However, in the recent announcement, the Sky Mavis team did not provide an update on how many validator nodes the Ronin network has now.
As part of the updated Ronin bridge architecture, Sky Mavis updated the smart contract software to let validators set daily withdrawal limits. The initial amount is set at $50 million and the team also introduced a circuit breaker that breaks down the financial value of withdrawals into three tiers.
- Tier 1 is for withdrawals less than $1 million and requires 70% of validators to sign off.
- Tier 2 is for amounts greater than $1 million and requires 90% of validator signatures.
- Tier 3 is more than $10 million for withdrawals and requires a 90% validator sign-off, a small transaction fee, and a seven-day review process.
What now for Axie Infinity
Firstly, Axie Infinity successfully worked out the issues and avoided losing too much customer loyalty in the process. Sky Mavis was transparent and forthcoming with information. Moreover, the Axie community already believed that Axie would make everyone whole again and regain its place as the most popular play-to-earn game on the blockchain.
While Ronin was created to solve major issues experienced while building Axie Infinity, the bigger picture was and still is to become the industry standard for blockchain gaming and consumer applications. Sky Mavis sees a future where Ronin is the network of choice to launch blockchain game developers, who will be able to leverage Ronin to create a broad-based gaming ecosystem that shares an enormous user base, community-owned dapps, and deep asset liquidity.
On-chain data shows us that weekly, unique active wallets interacting with Axie are up 6%, transactions swelled almost 10%, and volume is up over 31%. This performance pushes Axie to the fourth most used dapp on DappRadar across all categories at writing, while it also jumped back into the top three in the gaming category. Of course, the announcement arrived very recently, so it will be interesting to revisit the data in another week and see how players reacted.
Before the hack, DappRadar spoke to the Axie Infinity team about their success, their plans for the future, and more in an AMA session. If you want to learn more about Axie Infinity, Sky Mavis, and play-to-earn gaming, just head to our ultimate play-to-earn guide.
The above does not constitute investment advice. The information given here is purely for informational purposes only. Please exercise due diligence and do your research. The writer holds positions in various cryptocurrencies, including BTC, ETH, and RADAR.
