Axie Infinity Hack Sees Retail Traders and Gamers Being the Biggest Losers

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In Brief
  • Axie Infinity lost $600 million through the Ronin bridge hack

  • Developers have suspended withdrawals via the bridge, thereby affecting gamers who depend on the P2E

  • Sky Mavis has, however, vowed to refund all stolen funds.

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On March 23, Axie Infinity became the latest crypto project to lose millions to hackers. 

A breach of the Ronin network where the play-to-earn game is based led to a hacker stealing $620 million worth of crypto by exploiting the bridge. This was a loss on many levels and for many stakeholders connected to the project.

Hack shows how vulnerable Axie Infinity was

For one, it showed how vulnerable Axie Infinity is, especially given that the hack wasn’t discovered for almost a week. While this has affected the reputation of its developer, Sky Mavis, the biggest losers so far appear to be hundreds of thousands of players on the platform.

As a play-to-earn game, users of Axie Infinity earn SLP and AXS, which they can convert to fiat or other digital assets. This warning opportunity was what attracted many players to the platform. However, the users, most of whom are from low-income countries, face a new challenge with the hack.

Due to the hack, the ability to move earnings out of the game and convert them into other digital currencies has now been suspended. 

That ability functioned through the Ronin bridge, the software that was exploited to steal the funds. While Sky Mavis has vowed to recover the stolen funds, it has suspended the bridge to see if there are any more vulnerabilities.

Withdrawal suspension is affecting users

Although the gaming platform now allows withdrawal via Binance Exchange, several users still have their money trapped, and many lost their funds. 

Sky Mavis has stated that it will refund those who lost their assets in the attack, but there are no clear-cut plans on how it intends to do that. The delay in refilling the bridge continues to cost users, many of whom rely on the platform to make ends meet. 

According to an associate professor in computing and social responsibility at De Montfort University, Catherine Fleck, “Even a few days’ delay in refilling the bridge, that’s going to affect someone feeding their family or paying bills.”

Beyond that, some Axie players also relied on “scholarship programs” to play the game. This meant that they had backers who loaned them the assets they needed to play in exchange for giving part of the earnings to these backers. 

Unfortunately, with the bridge offline and users unable to withdraw, these scholars can’t pay their debt.

Despite the bridge being offline, Axie developers and investors still benefit from players’ activity, even if those players can’t cash out their earnings.

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Oluwapelumi believes Bitcoin and blockchain technology have the potential to change the world for the better. He is an avid reader and began writing about crypto in 2020.

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