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Over the past twenty years, the Web has evolved and its use has grown exponentially. As the number of users increases, so do the threats. The Internet has improved, as cyber attacks did: from malware to trojans to the timeless phishing scam, the methods are more or less still the same. If once it was a single individual who had to orchestrate and commit the crime, nowadays we talk about cyber-gangs, specialized and organized in various types of cyber hacks. One of the most affected technologies in recent years is the blockchain, indeed. According to an Elliptic report, Defi and the whole crypto market suffered losses of over $12 billion in 2020 and 2021, of which more than $10 billion were stolen over the past year. However, some of the thefts occur more due to negligence and oversight of the developers than to criminals’ acumen. Unfortunately, 2022 has also started under the sign of hacks and scams.
Sky Mavis & Axie Infinity
Axie Infinity has been created and developed by Sky Mavis, a Vietnamese company based in Singapore, founded in 2019. The company aims at revolutionizing the video game industry by developing blockchain games. Its goal is to create virtual worlds where users can freely exchange digital assets, creating a community-owned economy. Inspired by the Cryptokitties project, one of the first to mix Play-to-Earn and NFT elements, Sky Mavis conceived and released an alpha version of Axie Infinity in 2019.
Axie Infinity is an NFT-based online video game developed on the Ethereum Network. Players take care of their own NFTs, called Axies, axolotl-inspired digital animals. After the initial investment, players have the opportunity to earn a cryptocurrency, AXS (compatible with the Ethereum network), through gameplay mechanics. Initially released on the Ethereum mainnet, Sky Mavis has then created a sidechain in 2020, the Ronin Network.
Ronin under attack
The Ronin Network is a sidechain, one of Ethereum's parallel chains. With Axie Infinity unexpected success, Sky Mavis decides to create a dedicated network for gaming, reducing transaction costs, which are sky-high on Ethereum, and significantly improving scalability. Unfortunately, the good intentions of the Vietnamese company have been hampered by one of the largest thefts in DeFi history. On March 23 2022, a hacker breached the Ronin Network, specifically the Ronin bridge, a tool that allows users to transfer digital assets between different blockchains. The malicious actor managed to compromise five of Ronin's nine validator nodes. Sky Mavis reported on a post that the hacker stole 173,600 ETH and 25.5 million in USDC, a stablecoin pegged to the price of the US dollar. At the time of the attack, the total was approximately worth $620 million. The scammer found a backdoor to access one of the validator nodes and procured, in an unclear way, five access keys which allowed him to validate two false transactions. Due to the hack, Sky Mavis has been forced to shut the Ronin bridge indefinitely to avoid further attacks. The bridge is currently offline and should be accessible by the end of May 2022.
Cybersecurity threats
Cybersecurity sector has been constantly growing lately. Everyday cyber attacks are on the agenda. The latest researches present worrying statistics indeed:
- 94% of malwares is delivered via email.
- 85% of cybersecurity breaches are caused by human errors.
- A ransomware attack occurs every 10 seconds.
- Cybercrime's annual global losses are expected to reach $10.5 trilion by 2025.
Also, blockchain’s use cases are endless, and understanding the way to make this technology even more efficient is just the beginning.
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Cybersecurity vs Blockchain is an in-depth series about the most trending hacks in recent history. Below a comprehensive list of the ones we have been talking about:
Sources:
https://www.techtarget.com/searchsecurity/news/252515336/Axie-Infinity-hack-results-in-600M-cryptocurrency-heist
https://cryptobriefing.com/elliptic-estimates-12b-lost-to-defi-exploits/