How over $600+ million worth of NFT got stolen in Axie Infinity hack

Axie Infinity is supposed to have their much-awaited new version, Origin, released anytime. But that is not going well according to plan after a massive breach of the game’s asset system occurred and shocked the entire Axie community – with more than $600 million worth of NFTs stolen by still unknown hackers.

Sky Mavis announced that an exploit caused the hacker to gain access to drain all the assets from the Ronin Network. The $600 million value came from the NFT assets that were hijacked, totaling up to 173,600 Ethereum and 25.5M USDC. A part of their official statement through the official Axie substack reads as:

“There has been a security breach on the Ronin Network. 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 heist could be considered if not the biggest, but one of the biggest crypto-related thefts of all time. Jeff Zirlin, one of Axie Infinity’s co-founders, spoke about the hacking incident during the NFT LA conference today:

“It is one of the bigger hacks in history. We believe in a future of the internet that is open and owned by the users.”

Though he also assured everyone that they will continue building the future of the game while investigations about the matter will take place on the side.

“ETH and USDC deposits on Ronin have been drained from the bridge contract. We are working with law enforcement officials, forensic cryptographers, and our investors to make sure there is no loss of user funds. This is our top priority right now,” Sky Mavis’ post adds.

How did this happen?

Now based on what Sky Mavis has publicly stated, this “hack” was well thought out and put into place. The two prone attack targeted both of Axie’s validator nodes and a backdoor through the RPC (remote procedure call) node.

To understand how it all worked, lets simplify it in layman terms.

Validator nodes are the backbone of any blockchain. They guarantee and track all movement of data on the blockchain. This is done by cross-checking to make sure everything is running smoothly and accurately across the board. By taking control of multiple validator nodes the data can be “corrupted” and transactions altered. This is by no means an easy task. The hacker would have to control the majority of nodes to make his theft work, which apparently he managed to do. To us this reeks of an inside job or someone intimate with how the system is set up. Furthermore, corrupting the RPC takes more then just knowledge of the system, some requirements and rights have to be obtained for the hacker to “backdoor” into the system.

Thefts of this magnitude usually mean someone either slipped up in terms of security of access to the system, or an insider was in on it.

The Future of Axie Infinity

Now the heist that took place is the talk of the town when it comes to Axie, the future of the game could be put in jeopardy.

Axie Infinity announced last March 18 that the soft launch for Axie Origin will be released through phases. They mentioned that they will “start with a small scope and gradually expand in the months after initial launch,” and shall only be available for desktop devices through the Mavis Hub by that time.

But now is a different story. Why? Well, the fact that something this big happened may cause a lot of impact on existing and potential investors to keep on diving and dive into the game. $600 million is not a joke – that’s more than any NBA superstar could have for the rest of his career as a player.

And with other possible security breaches coming? Of course, everyone who is involved or would like to be involved and be part of the Axie ecosystem could think twice, or even thrice to put their money on the line. So, having more delays in Origin’s release could be expected, and let’s hope that it will just stay as a delay.

But at least, Sky Mavis assured us that the stolen assets are still in the hacker’s digital wallet, for now. Though big NFT exchanges such as Binance is also looking into the issue while helping the team to investigate this whole matter.