Sky Mavis raises $150 million to refund users after Ronin network attack

Binance, a16z, and Animoca Brands chip in for funding round while the network has its security upgraded.
Written by Chris Duckett, Contributor
Image: Jam Sta Rosa/AFP via Getty Images

Vietnamese blockchain game company Sky Mavis and makers of the play-to-earn game Axie Infinity have announced a $150 million fundraising round to help reimburse those impacted by the recent Ronin network attack.

Last month, the company revealed it had 173,600 in Ethereum (ETH) and 25.5 million USD coins drained from its Ronin network, something Sky Mavis created to get around Ethereum network congestion. At the time, the crypto assets were valued at over $600 million.

For the attack to occur, the attacker gained control of the four validators operated by Sky Mavis, and one operated by Axie DAO.

"The attacker found a backdoor through our gas-free RPC node, which they abused to get the signature for the Axie DAO validator," the Ronin Network explained last month.

"This traces back to November 2021 when Sky Mavis requested help from the Axie DAO to distribute free transactions due to an immense user load. The Axie DAO allowlisted Sky Mavis to sign various transactions on its behalf. This was discontinued in December 2021, but the allowlist access was not revoked."

In response, the Ronin bridge and Katana Dex exchange were halted, the number of validators increased to eight, and security teams at major crypto exchanges were contacted.

On Wednesday, Sky Mavis said it was now increasing the number of validators to 21 in the next three months.

"The new round, combined with Sky Mavis and Axie balance sheet funds, will ensure that all users are reimbursed. The Ronin Network bridge will open once it has undergone a security upgrade and several audits, which can take several weeks," Sky Mavis said.

Leading the funding round was Binance, which will also be allowing ETH withdrawals and deposits for Axie Infinity users.

"The 56,000 ETH compromised from the Axie DAO treasury will remain undercollateralized as Sky Mavis works with law enforcement to recover the funds. If the funds are not fully recovered within two years, the Axie DAO will vote on next steps for the treasury," the company said.

"We believe that Axie will go down in history as the first game to imbue players with true digital property rights and recent events have only strengthened this conviction."

Also joining the funding round were Animoca Brands, a16z, Dialectic, Paradigm and Accel

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