Axie Infinity Developer Sky Mavis Raises $150M to Reimburse Stolen User Funds
Axie Infinity developer Sky Mavis has raised $150M in an investment round led by Binance. Animoca Brands, a16z, Dialectic, Paradigm and Accel are some of the other firms that participated in this round.
Earlier in April, unidentified hackers had stolen around $600M USD worth of cryptocurrency from the Ronin blockchain which supports one of the biggest Non-Fungible Token (NFT) games, Axie Infinity. According to the official discord of Axie Infinity, the breach happened on 23rd March but was only recently discovered by Sky Mavis. To offset the loss they just announced this funding round which will be used to restore some of the funds on the Ronin blockchain.
In addition to the funding, Sky Mavis and Binance will work together closely on projects that include exclusive Land sales and enable Binance login via The Mavis Hub.
Investigations are still ongoing to find the hackers behind the $600 million USD crypto theft
According to Sky Mavis, Ronin uses “9 validator nodes'' to prevent fraudulent transactions and protect its users. These validator nodes were compromised resulting in 173,600 Ethereum (ETH) and 25.5 million USDC (United States Dollar Coin) being drained from the Ronin network.
The attack was socially engineered, and an investigation is ongoing. The root cause of the breach was the small validator set which made it much easier to compromise the network. Sky Mavis will increase the validator group to 21 validators within the next three months, which will be a split between various stakeholders in the Axie community, and will together manage an open-source codebase to prevent further attacks.
In an official press release, Sky Mavis CEO Trung Nguyen said, “Sky Mavis is committed to reimbursing all of our users' lost funds and implementing rigorous internal security measures to prevent future attacks. With the support of Binance and other industry leaders, we will be able to quickly expand the validator set from five to 21 validators to ensure the security of the Ronin network.”
The Ronin Network bridge will open after it has undergone a security upgrade and several audits, which could take several weeks. In the meantime, Binance is supporting the Ronin Network by providing ETH withdrawals and deposits for Axie Infinity users, enabling most of them to operate freely.
Once the Ronin Network bridge is open, all individual users will be able to withdraw their funds. The 56,000 ETH compromised from the Axie treasury will remain undercollateralized as Sky Mavis works with law enforcement to recover the funds. If the stolen funds are not fully recovered within two years, the Axie Decentralized Autonomous Organization (DAO) will vote on the next steps for the treasury.