Everything We Know about Ronin Sidechain Restart

On June 28, 2022, the Ronin sidechain was successfully restarted. The network was down for a few months because a large-scale hack of the cross-chain bridge at the end of March stopped it from working. As a result of the attack, the attackers stole cryptocurrencies worth $625 million. In this article, we’ve put together all the most important information about Ronin and how it will start up again.

What was the Reason for Ronin Sidechain?

Ronin is a project of Sky Mavis, which develops the popular blockchain game Axie Infinity. At first, the app ran on Ethereum, but it didn’t have enough bandwidth to handle in-game transactions.

Then Sky Mavis came up with the Ronin sidechain, which was a second-level solution. The Ronin Bridge cross-chain bridge was the way for it and Ethereum to talk to each other. This made it possible to transfer ERC-20 assets to Axie Infinity.

The game has become a lot more popular in 2021. From May 2021 to January 2022, 1.44 million people bought about 12.6 million non-fungible tokens (NFTs) in it. Axie Infinity is now the leader in terms of how many NFTs are traded. In 2021, this app is expected to trade between $3.5 billion and $3.85 billion worth of NFTs, while NBA Top Shot had only $827 million.

Due to the excitement around the game, the bet on the sidechain justified itself. Analysts estimate that in November 2021 alone, Ronin processed more than 560% of the total number of transactions in Ethereum.

On the Ethereum network, Ronin moved about 4 times faster than it did on Ronin. Thanks to Ronin, transactions on the Axie marketplace and the transfer of assets on the network were done in a few seconds. High commissions on the network were also taken care of by Ronin. Gas fees in Ethereum were between $100 and $200, which made microtransactions too expensive to be worth doing.

Users of the official Ronin Wallet also got a certain number of free transactions for doing different things in Axie Infinity and storing NFT characters (Axie) or virtual plots of land in the wallet.

How did Ronin get hacked?

One of the biggest hacks in the history of decentralized finance happened to Axie Infinity’s Ronin sidechain at the end of March 2022. (DeFi). Using the exploit, the attackers withdrew more than $625 million worth of crypto assets: 173,600 ETH and 25.5 USDC.

The developers discovered the security breach only a week after the attack. One of the team members was the victim of a phishing attack, which gave the attacker access to the company’s infrastructure and Ronin validators.

In the Ronin network, there were only 9 validators. At the same time, only 5 of them needed signatures to confirm the transaction. At the time of the attack, Sky Mavis operated 4 out of 9 validators. Hackers ran another missing validator that was run by Axie DAO through a backdoor that was linked to Ronin’s gasless RPC node.

Basic security rules were broken by this kind of design. Most of the time, different teams or companies run the validator nodes in a blockchain. This keeps the structure spread out. The people who made Ronin used a centralized method. Most of the validators were from one company. This turned out to be a huge mistake.

Is There a Token for Ronin?

Sky Mavis released the RON token at the beginning of 2022. This asset is used to manage projects and do business on the Ronin network. After the hack, the RON price began to decline and fell from $2.3 at the end of March 2022 to $0.2 by the end of June.

After the sidechain restart was announced, the price of RON went up by about 40% over the next week, reaching $0.36 by the time of the event. But people have noticed that the blockchain game Axie Infinity, which is based on Ronin, has been steadily losing money and that the project has bad tokenomics.

What apps did Ronin work with?

Aside from Axie Infinity, the most important sidechain app was the Ronin Wallet, which let users store crypto assets related to games. In-game cryptocurrencies could also be traded on the decentralized exchange Katana (Ronin DEX), which worked in the ecosystem.

What Happened After Starting Over?

After a security update and several rounds of Ronin Bridge source code audits, the developers of the blockchain game Ronin have brought it back online. They have also added new security measures, like an automatic “switch” that stops the bridge if someone tries to pass a suspiciously large swap across it. Ronin Bridge currently has a withdrawal limit of $50 million per day.