Axie Infinity Expands Scope One Year After $625M Hack Incident
More than a year has passed since the blockchain powering the NFT-based game Axie Infinity fell victim to a record-breaking hack totaling $625 million. The attack, attributed to the Lazarus group from North Korea by U.S. authorities, remains the largest blockchain network hack in terms of stolen value to date.
Now, nearly a year since the Ronin hack made headlines, Sky Mavis—the company behind Axie Infinity—has announced overhauls to the core systems of Ronin to make the network more decentralized and less susceptible to common vulnerabilities found in some blockchains.
Alongside these upgrades, Sky Mavis has collaborated with other game development studios to expand the Axie universe and extend Ronin to new blockchain-based electronic games.
Reflecting on the incident one year later, Jeff Zirlin, co-founder of Sky Mavis, remarked, "I think we consider the incident a badge of honor. We've seen many projects collapse in adversity this year, so we're really proud to be here and continuing to build."
New Ronin
Axie Infinity, one of the pioneering "play-to-earn" Web3 games, allows players to earn cryptocurrency and trade in-game items via blockchain. According to Sky Mavis, the game has generated $1.3 billion in revenue since its launch in 2018.
Initially operating on Ethereum, Axie faced challenges due to high fees and the chain's sluggishness. These issues prompted the creation of Ronin—a faster, cheaper sidechain capable of asset interoperability with Ethereum but featuring its own application ecosystem and security mechanism.
The Ronin upgrade will change the consensus mechanism from proof-of-authority to delegated proof-of-stake. Under the old system, Ronin's security was overseen by a small manually selected group from Sky Mavis, a factor contributing to its vulnerability to attacks last year.
The new system allows users to stake $RON tokens to earn interest and participate in managing the network's validation process. "Now, anyone with a minimum of 250K RON can become a validator and participate in block production," Sky Mavis stated in a release.
Ronin's Position in Ethereum Scaling Race
The Ronin upgrade is positioned as a new class of Ethereum scaling chains known as layer-2 rollups, aiming to achieve similar goals as the original Ronin chain set out for: lower fees and faster transactions. Some of these blockchains specifically target gaming as a potential use case. Additionally, these networks have ultimate systems that will enable them to borrow Ethereum's native security—meaning they won't rely on the type of cross-chain bridging technology that was targeted in last year's Ronin hack.
However, Ronin developers acknowledge that it will take time for a large game like Axie Infinity to safely transition to these more advanced scaling chains. Zirlin noted, "They're the innovators that will push us towards a more decentralized and scalable future. But there's still much work to be done. It's not a solved problem."
Zirlin highlighted that Sky Mavis has worked to reimburse users from last year's hack and implemented other technical measures—beyond upgrading Ronin's consensus mechanism—to prevent similar attacks in the future, including bolstering Sky Mavis' internal security measures, increasing the security team's size, and enhancing blockchain monitoring capabilities.
Beyond Axie
Over the past year, Sky Mavis has worked to expand the Axie ecosystem.
A decline in players may partly stem from broader cryptocurrency market downturns, significantly impacting Axie's in-game economy. However, Sky Mavis also acknowledges responsibility for the user decline; while the game has a dedicated fan base, it has long faced criticism from players who argue that the "play-to-earn" mechanism has introduced vulnerabilities into the game.
Sky Mavis has worked to enhance Axie's core gameplay over the past year with significant upgrades and new play modes, but Ronin's long-term vision always involves expanding beyond Axie.
New game-building teams on Ronin include Tribes Studio, Bali Games, Directive Games, and Bowled.io—studios with staff from DICE, LucasArts, Square Enix, Ubisoft, and other AAA game producers.
"Partner studios have the opportunity to access Axie's IP for their own game titles or build entirely new games with separate IPs on Ronin," explained Sky Mavis in a statement.
Zirlin concluded, "We're really building this infinite experience ecosystem. With this upgrade to Ronin and the announcements from these game studios, we're showing that we're expanding the Axie universe. Now, we're also moving beyond Axie, incubating, and truly becoming this launching pad for the best and most immersive Web3 gaming experience."
