After A $600 Million Hack, The Battle-Hardened Ronin Tunnel To Axie Reopens

July

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After Sky Mavis established a circuit breaker system and daily withdrawal limits, the Ronin bridge linked to Axie Infinity is back up with a modified design.

The Ronin bridge is back up three months after it was breached for more than $600 million, according to Sky Mavis, the firm behind the well-known play-to-earn (P2E) nonfungible token (NFT) game Axie Infinity.

Users can shift assets between the sidechain and the Ethereum mainnet using the Ronin bridge and an Ethereum sidechain developed for Axie Infinity.

The bridge was emptied of 173,600 ETH and 25.5 million USDC on March 29 after hackers were capable of getting private validator keys. At the time, the hack was worth more than $620 million.

The Sky Mavis team announced on Tuesday that the Ronin bridge is now functional following three audits (one internal and two external), a revised design, and a complete restoration of users’ stolen assets:

“All wETH and USDC owned by Ronin Network users is now fully backed 1:1 by ETH and USDC on Ethereum, as promised. All users’ have been made whole.”

By providing the ETH liquidity to support users’ Wrapped ETH (wETH) on the Ronin network, Sky Mavis has now repaid 117,600 ETH and 25.5 million USDC in total.

Around 46,000 of those ETH had already been handed out as of April, thanks to Binance’s provision of a bridge to its exchange that enabled customers to transfer their wETH to ETH. The founders’ cash and the balance at Axie Infinity provided liquidity for the transaction. To aid Sky Mavis in paying back Axie Infinity users, Binance led a $150 million fundraising round.

The Axie DAO Treasury holds 56,000 of the total stolen ETH, which will remain uncollateralised as Sky Mavis “works with law authorities to restore the funds.”

Sky Mavis has upgraded the intelligent contract software as part of the updated bridge design to permit validators to develop daily withdrawal restrictions, with the initial amount set at $50 million. The group also created a circuit breaker system that separates the number of withdrawals into three categories.

Tier 1 withdrawals under $1 million require the approval of 70% of validators, and Tier 2 withdrawals over $1 million need the signatures of 90% of validators. Tier 3 requires a 90 percent validator sign-off, a minor transaction fee, and a seven-day approval process for withdrawals over $10 million:

“The new bridge design includes a circuit-breaker system as a contingency plan which increases the security of the bridge by halting large suspicious withdrawals.”

In a postmortem analysis published in late April, Sky Mavis confirmed that the Ronin bridge had been accessible to the hack due to its lack of decentralisation. It only had nine validator nodes at the period, and four of them were available to all employees.

Sky Mavis swiftly increased the number of nodes to 11, then stated plans to expand the number to 21 within three months of the postmortem, with the long-term aim of reaching 100 total nodes.

In the latest revelation, the team did not provide an update on the number of validator nodes that the Ronin network currently owns.

As per data from CryptoSlam, Axie Infinity’s monthly NFT sales volume fell precipitously in 2022, from $126.4 million in January to only $2.8 million in June.

 

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