In March this year, crypto — really the digital world and all its history — saw one of the biggest hacks and consequent thefts of all time. A hacker exploited the Ronin bridge (an Ethereum sidechain developed for Sky Mavis’s game, Axie Infinity) and made off with $622m of Ethereum and USDC. Strangely, it took nearly 7 days for anyone to notice the hack, and it wasn’t until a whale wanted to draw down 5,000 ETH and couldn’t, that it was flagged. The Ronin bridge and the Katana DEX were both halted.
To catch anyone up who is confused by the above, Axie Infinity moved from Ethereum mainnet to a purpose-built sidechain developed by Sky Mavis, called Ronin. This acted as a way to avoid the pitfalls of Ethereum, such as gas fees and long transaction times. However, a bridge between the two was needed.
Interestingly, in January 2022, founder of Ethereum, Vitalik Buterin, flagged the security limitations of bridges between blockchains in a Reddit AMA.
Yesterday, Axie Infinity announced the reopening of the Ronin bridge and the measures they have taken to stop any similar events taking place in the future:
The funds lost in the hack are being addressed in a number of ways and I would suggest reading Ronin’s blog post to understand exactly how. However, the pertinent information for users — particularly those affected — is the following:
All wETH and USDC owned by Ronin Network users is now fully backed 1:1 by ETH and USDC on Ethereum, as promised. All users’ have been made whole.
Sky Mavis cannot be criticized for their reaction to the hack, even if retrospective questions were asked of the security of the bridge in the first place. Sky Mavis threw the book at this hack, drafting in everyone from major law enforcement agencies to the biggest and best names in crypto to pitch in. Sky Mavis also opened a bug bounty program where white hat hackers and those who stumble upon security flaws could be rewarded as much as $1m.
The question is: will players feel comfortable using the bridge again? I think for the most part it will be a yes. Security has been improved and all losses were covered. That said, I suspect it will deter some from not just Ronin’s bridge, but all bridges.
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