Axie Infinity (AXS) hack: victims are compensated, also via funding round

Apr 7, 2022

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Axie Infinity (AXS) hack: victims are compensated, also via funding round

Originally posted here.
By: guido

Overview

Led by Binance, a $150 million funding round has been completed for Sky Mavis. Now the company behind Axie Infinity (AXS) wants to compensate the […]

The Post

Led by Binance, a $150 million funding round has been completed for Sky Mavis. Now the company behind Axie Infinity (AXS) wants to compensate the victims of the 600 million US dollar hack.

Just over a week ago, the blockchain game Axie Infinity (AXS) had to publish bad news: Attackers had been able to steal crypto assets worth the equivalent of a good 600 million US dollars via the sidechain Ronin, which belongs to the ecosystem. This makes the hack one of the biggest in crypto history. At least for the victims, among them many players of Axie Infinity, the situation now seems to be solved in a benign way. Sky Davis, the company behind Axie Infinity and Ronin, has announced  that all victims can expect full compensation.

This is also made possible by the fact that a financing round with a volume of 150 million US dollars was successful for Sky Mavis. In the process, the world’s largest crypto exchange Binance had taken the lead and recruited crypto companies Animoca Brands, a16z, Dialectic as well as Paradigm. It was not disclosed who was involved and with how much money. Binance had already supported Axie Infinity when it entered the market in 2020 with an IOE on Binance Launchpad and also integrated the sidechain Ronin into its services. They continue to believe in Sky Davis as a company that enriches the crypto industry, Binance CEO Changpeng Zhao was quoted as saying.

According to the statement, the fresh capital will be joined by funds from Sky Davis and Axie Infinity itself to sufficiently fill the compensation pot. In addition, Ronin will undergo external security checks before a re-launch, and the number of validators in the Ethereum (ETH) sidechain will be increased to 21 from 9 previously. The attack on Ronin was successful because the hackers took control of 5 of the 9 network points that were allowed to validate transactions. Sky Davis continues to hope that the loot can be secured by law enforcement officials and therefore writes 56,000 of the outflowed 173,600 Ethereum (ETH) loot into Axie Infinity’s collaborative books for the time being.

Bottom Line: Axie Infinity – Show Must Go On.

The quick willingness of Binance and others to substantially back Sky Davis and thus Axie Infinity is easy to explain. After all, the announcement about it also emphasizes: with more than 2.2 million monthly active players, Axie Infinity is probably the most successful blockchain game of all time to date, and Ronin has become a fixed point for trading NFTs alongside it with its own wallet. The hack was only possible because security measures were not working at Sky Davis. If the project had now crashed due to non-compensation, this would probably also have severely diminished trust in the industry as a whole. In this respect, the subsidies from Binance and Co. are also an investment in the image of blockchain gaming and NFTs in general – and could, by the way, pay back in the medium term if Sky Davis develops positively.

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