Restarting the Ronin Sidechain: What Happened?
On June 28, 2022, the Ronin sidechain was successfully restarted. The network has not been working for several months: its work was stopped after a large-scale hack of the cross chain bridge at the end of March. Attackers stole $625 million worth of cryptocurrencies as a result of the attack.
What was the purpose of the Ronin sidechain?
Ronin is a project by Sky Mavis, which developed the popular blockchain game Axie Infinity. Initially, the application ran on Ethereum, but its bandwidth was insufficient to process in-game transactions.
To address this, Sky Mavis developed a second-tier solution – the Ronin sidechain. The link between it and Ethereum was the Ronin Bridge cross chain, which made it possible to transfer ERC-20 assets to Axie Infinity.
In 2021, the game’s popularity skyrocketed: between May 2021 and January 2022 alone, 1.44 million customers made about 12.6 million transactions with NFTs in the game.
Ronin was about 4 times faster than the Ethereum network. Thanks to Ronin, transactions on the Axie trading floor and asset transfers on the network were performed within seconds.
Ronin also addressed the problem of high gas fees on the network. Ethereum gas fees can range from $100 to $200, which makes microtransactions impractical.
How did Ronin get hacked?
In late March 2022, the Ronin sidechain used by Axie Infinity fell victim to one of the largest hacking attacks in the history of decentralized finance (DeFi).
Taking advantage of the exploit, attackers withdrew more than $625 million worth of crypto-assets: 173,600 ETH and 25,500,000 USDC.
The developers discovered the security breach only a week after the attack. It turned out that one of the team members had suffered a phishing attack, as a result of which the intruder gained access to the company’s infrastructure and Ronin validators.
Does Ronin have its own token?
Sky Mavis launched a $RON token in early 2022. This asset is designed to manage the project and is used for transactions on the Ronin network. After the hack, the price of $RON began to decline and dropped from $2.3 at the end of March 2022 to $0.2 by the end of June.
Following the announcement of the sidechain relaunch, RON gained about 40% during the week and reached $0.36 by the time of the event.
What applications were running on Ronin?
Besides Axie Infinity, the main sidechain application was Ronin Wallet, which allowed storing crypto-assets related to the game. The ecosystem also had a decentralized exchange, Katana (Ronin DEX), where in-game cryptocurrencies could be exchanged.
What happened after the restart?
The developers of the blockchain game restarted Ronin after security updates and several rounds of audits of the Ronin Bridge source code. In addition, they implemented new security mechanisms, such as an automatic “switch” that stops the bridge’s operation when a suspiciously large swap tries to pass through it. The Ronin Bridge now has a withdrawal limit of $50 million per day.
Immediately after the incident, Sky Mavis increased the number of validators required to validate transactions in Ronin. The company promised to decentralize the network and bring the number of working nodes to 100, as well as implement a zero-trust architecture.
One of the most important elements of the relaunch is the provision of compensation for the stolen funds. Back in April, the developers of Ronin raised $150 million in financing for this purpose. Sky Mavis promised to pay another $450 million from its own money.
How do I transfer assets from Ethereum to Ronin?
The cross chain bridge for Ronin is already up and running. It can be used to transfer ETH, AXS (native ecosystem coin), SLP (Axie Infinity’s main in-game asset), or USDC stablecoin from Ethereum to Ronin. To swap, you’ll need a browser wallet that supports Ethereum, as well as Ronin Wallet.