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Is Axie Infinity Being Honest to Players and Investors?

By Cje95 | Chronic Illness and Crypto | 10 Aug 2022


Last year Axie Infinity was all the rage and was the head-over-shoulders leader when it came to both blockchain games and the play-to-earn model. When they suffered one of the most expensive hacks in crypto history with a loss worth roughly $622 million in crypto in March they could have folded. Much to many people's surprise and excitement, Sky Mavis the company behind the game, was able to navigate their way through this time and fundraise enough to survive. Even with their survival though the company has not escaped criticism for not only how the hack occurred but also its response to it. 

 

Previous Issues

There are several very valid reasons that Sky Mavis came under intense scrutiny. Immediately after the hack occurred people reviewed blockchain transactions and saw that the hack was not discovered for 6 days. Once it was discovered it was another 22 hours before the company publicly acknowledged that it had occurred. All this time people were able to further invest money and purchase NFTs that would soon crater in value. Why it took roughly a week for the company to realize it had lost $622 million in Ethereum and USDC is something that honestly still confuses me to this day. 

 

Further, when players and investors both found out the Ronin network only had 9 total validator nodes the outcry appeared to be a mixture of shock and anger. The hacker only had to gain control of 5 validators and this was done by gaining the private keys of 4 Sky Mavis validators and 1 Axie DAO validator. To pull this off they reached out to employees of Sky Mavis via a fake company on LinkedIn and had these employees go through several founds of fake job interviews before being offered an enormous compensation package. When a senior engineer clicked on the PDF containing the fake official offer the hackers had control and proceeded to take control of the 5th node needed with the Axie DAO node allowing for the crypto to be drained. 

 

Attempts have been made to recover funds with varying levels of success. Binance scored the biggest recovery when they recovered funds spread across 86 wallets from the hack resulting in $5.8 million being recovered in April. The issue facing the recovery though is the group behind the hack, the infamous North Korean hacker group known as Lazarus. They are a well-known group to law enforcement across the world and did funnel well over $170 million through Tornado Cash to try and hid the funds. Still, regulators have been able to identify scores of wallets associated with the hack and have gotten companies and organizations to blacklist the transactions from these wallets. 

 

New Issue

Even with the story seeming to die down since they have announced and started to implement the plan for refunding users Sky Mavis has managed to still attract all the wrong kinds of attention. About a week ago it came out that the CEO of Sky Mavis had moved millions of dollars worth of tokens of Ronin before the hack was disclosed. Trung Nguyen transferred about $3 million worth of the game's AXS governance token from Ronin to Binance. While Sky Mavis has claimed that this was done to give the company flexibility and it was done from the Founders personal wallet for this reason it has outraged people once again. 

 

The issue that people have with this is that the Ronin network was frozen 3 hours after this transfer was done and then no one talked about it. In all honesty, everything the company has said about this being for the good of the players and the survival of the company this is nothing short of a public relations nightmare. At the least, it looks like the founder was out for nothing short of personal gain while at the worst it looks like they were going to try and make a few more million before the collapse. 

 

The reasons that the company has said do make sense and could have been vital in preventing a complete collapse however the execution and lack of transparency are what people are upset about. It was a self-inflicted injury that could have been avoided but was not. Thus it has further irritated players who lost out big time in the collapse and makes them question the leadership of the company and project. 

 

 

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Cje95
Cje95

Graduated from Texas A&M in May of 2020 had dabbled in crypto since 2017 but dove in at the end of 2019. December of 2020 packed up and moved to D.C.! Huge sports fan, space nerd, and international newsreader! Follow me on Twitter @Cje95_


Chronic Illness and Crypto
Chronic Illness and Crypto

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