How hackers stole $ 600 million from Axie Infinity

 Hackers exploit the Ronin network, which has a low level of decentralization, hijacking authentication


According to Arstechnica, when it was first built, Axie Infinity ran directly on the Ethereum blockchain. However, the characteristics of this blockchain are high transaction fees, while the transaction speed is slow. This gradually becomes a barrier to the development of the game when the number of users is increasing.


To solve that problem, in 2020, Sky Mavis started using a private blockchain parallel to the main blockchain (sidechain) to reduce the need to pay Ethereum "gas" fees for in-game transactions. Initially, Sky Mavis chose the sidechain from its third-party partner, Loom Networks. By March 2020, the company announced to stop using Loom, and also introduced the self-developed sidechain Ronin.

Unlike Ethereum's PoW (proof-of-work) mechanism that uses the entire distributed blockchain network to validate transactions, Ronin operates using a PoA (proof-of-authority) mechanism. This mechanism uses a small set of carefully selected nodes for authentication. Another option that can be used is through exchanges like Binance or Katana to bridge in-game assets between Ronin and Ethereum. However, using an external exchange will also increase the process and cost if the transaction is large-scale.

Ronin's mechanism uses nine validator nodes. In fact, during the past time, the system only requires validation from 5 of these 9 nodes to complete a transaction. Using a small number of nodes is the key to helping Sky Mavis meet high transaction volumes at a much lower cost than the vast Ethereum network, experts say. But this also shows that the centralization of the network is not high, when the right to authenticate is in the hands of a few nodes.

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