Ronin Network’s $625M breach could be ranked as the biggest attack on DeFi

Over the past year, there have been an increased interest in decentralized finance (DeFi) projects by cybercriminals. DeFi protocols are usually exposed to vulnerabilities, which cybercriminals exploit to steal millions of dollars.

The recent attack on the DeFi space happened on the Ronin network. A hacker attacked a bridge between the network and the Axie Infinity NFT game during this breach. During this breach, the hacker managed to steal $625 million worth of Ethereum and the USDC stablecoin. The staggering amount stolen by the hackers makes this the largest attack in the DeFi sector.

$625M stolen from the Ronin network

On March 29, the breach on the Ronin network was confirmed by Sky Mavis, which is the operator for the Axie Infinity game. Sky Mavis said that the investigations into this attack were ongoing.

After the preliminary investigations, the team said there was a likelihood that the breach was caused by social engineering or vulnerability in the network’s code. It also added that it was certain that the breach was caused by an external attack and that no insiders were involved.

As the investigation continues, the Ronin bridge has been temporarily halted, and no transactions are being supported. The Katana decentralized exchange (DEX) has also been closed because of the breach.

The attacker managed to walk away with 173,600 Ether tokens (valued at $600M at the time of the attack) and 25.5 million USDC tokens (valued at $25.5M). Sky Mavis said that most of the stolen cryptocurrencies were still in the wallet linked to the hacker. It added that efforts were underway to recover these stolen funds.

In cases where a network has been hit by a massive hack such as this one, the network usually reaches out to the hacker and asks them to return the funds, promising them a few millions of dollars for returning the funds. This happened last year after the $600M hack on the Poly Network. The majority of these funds were returned by the hacker.

Sky Mavis has said that it is working with law enforcement agencies in the investigations concerning this hack. It is also working with Chainalysis, a blockchain analytics firm that tracks transactions made on the blockchain.

The boom of Axie Infinity

Axie Infinity is a play-to-earn game that was launched in 2018. The game has become increasingly popular over the past year, and it has surpassed $4 billion worth of sales. Players on Axie Infinity must buy NFT characters called “axies” that they train and use to battle other players.

Before this attack, Axie Infinity was ranked as the most successful play-to-earn project in blockchain gaming. The game saw a major boom in November, leading to the Sky Mavis team making changes to support the influx of users. However, the team failed to revoke permissions granted when adopting these changes. The hacker exploited these permissions, stealing the $625M worth of crypto.