After $600 million crypto heist, Axie Infinity team raises $150 million and launches another NFT game

Image: Sky Mavis

A hacker stole hundreds of millions of dollars from Sky Mavis, the company behind the Axie Infinity game. Sky Mavis realized it had been attacked when a user couldn't make a withdrawal for six days.

Sky Mavis received $150 million in investments that will be used to ensure that all users affected by the Ronin Validator Hack will be reimbursed. As a team, Sky Mavis has made an intentional decision to focus on what lies ahead.

The list of names that bought in to bail out Sky Mavis was led by companies that work with Axie and have huge sums tied up in Web3 and NFTs. A16z, Animoca Brands, and a number of others are on the list.

Sky Mavis plans to reopen the Ronin Network bridge after it undergoes a security upgrade and audits to see if there are other weaknesses. According to the exchange, all individual users will be able to withdraw their funds after the network reopened transactions.

The Sky Mavis team says the March 23rd theft was socially engineered and took advantage of vulnerabilities from trade. While they are committed to making players whole using their own funds combined with the investments, the 56,000 ether that was taken from the Axie Infinity DAO's treasury will remaincollateralized. They want to wait two years and then have a vote on what to do next.

The stolen funds, worth over $540 million, are still in the wallet where the thief or thieves left them. Anyone can see transactions made on the blockchain, which makes it difficult to attempt to launder a haul of that size. Law enforcement organizations are focusing on the source of funds more carefully, and washing such an enormous sum could take a long time.

The Wall Street Journal reported that the CEO of bug bounty platform Immunefi said it could take years to move the money. As small fractions of the stolencryptocurrencies shift out of the thief's account to other wallets and into mixers like Tornado Cash, industry watchers like Peckshield continue to post real time alerts.

Over the next three months, the Ronin Network will increase the number of validators on its proof-of-stake network from five to 21. Things are faster and more efficient if there are fewer nodes to review transactions. In this case, the attacker took over five of the nine nodes and could withdraw any funds they wanted.

4/ We thank everyone in the community for their patience as we re-created the Battle system from scratch to be more fun, beautiful, and engaging. This is a huge step for the Axie Infinity ecosystem and it took the support from every community member out there to make this happen. pic.twitter.com/gAMTe4qkxD

— Axie Infinity (@AxieInfinity) April 7, 2022

According to a report by Bloomberg, before the hack, Axie Infinity was already suffering from a 45 percent drop in daily active users, and in-game economy issues that caused operators to cut the amount of SLP token players could earn.

Despite the theft, the company just launched an alpha version of its next game, which will invite players to take on the fun role.

Unlike the base game, players will start with three free axes. The idea is that it is a way for people to earn money. New players will be able to learn the game and fall in love with the universe before needing to touch NFTs.

The current Battles v2 (Classic) version of the game will remain live until they complete testing, then deprecate the old version and move token rewards into Origins, removing the valuable incentive to play the older game. It is possible for players to have their minds made up that users will be reimbursed after the big theft, but is that enough to make them confident it won't happen again?