Axie Infinity’s Ronin Blockchain Overhauls Tech, Expands to New Game Studios a Year After $625M Hack

Ronin will transition to a delegated proof-of-stake consensus mechanism and expand beyond Axie Infinity’s IP.

AccessTimeIconMar 30, 2023 at 10:00 a.m. UTC
Updated Mar 31, 2023 at 6:32 p.m. UTC
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Last week marked the one-year anniversary of the Ronin network hack, when the blockchain that powers the non-fungible token (NFT)-based Axie Infinity video game was exploited for a record-shattering $625 million. That attack – which U.S. authorities traced to North Korea’s Lazarus hacker group – remains the biggest-ever hack of a blockchain network in terms of value stolen.

Now, almost exactly a year to the day after the Ronin hack made mainstream headlines, Sky Mavis, the company behind Axie Infinity, says it is overhauling Ronin’s core systems to make the network more decentralized and less susceptible to the kinds of single points of failure that doomed it last year. Along with the upgrade, Sky Mavis says it has partnered with other game development studios to build out the Axie universe and expand Ronin to new blockchain-based video games.

A year on from the attack, “I think we see the incident as a badge of honor,” Sky Mavis co-founder Jeff Zirlin told CoinDesk. “We've seen so many projects crumble under adversity this year, so we're really proud to be here and to be building.”

New year, new Ronin

Axie Infinity was among the first breakout “play-to-earn” web3 games, allowing players to earn crypto and trade in-game items via blockchain. According to Sky Mavis, the game has earned $1.3 billion in revenue since it launched in 2018.

Axie Infinity initially lived on Ethereum, but the chain’s relatively high fees and sluggishness presented challenges to Axie's growth and accessibility. These issues were the initial impetus behind Ronin – a faster, cheaper “sidechain” that can swap assets with Ethereum but has its own app ecosystem and security apparatus.

Ronin’s upgrade will change the consensus mechanism used to operate the network – transitioning the chain from “proof-of-authority” to “delegated proof-of-stake.”

Under the old system, the Ronin network was secured by a small group of entities hand-picked by Sky Mavis. The small group tasked with securing Ronin in its early days is partially to blame for leaving it vulnerable to attack last year.

The new system will allow users to “stake” some of Ronin’s RON tokens to earn interest and help curate the set of validators that operate the network. “Now, anyone with a minimum of 250K RON can become a validator and take part in block production,” Sky Mavis said in a statement. “At the same time, any RON holder can stake their tokens and participate in validator selection.”

RON was trading at $1.12 at press time, according to CoinGecko, meaning one would need a minimum of over $250,000 to be eligible to become a validator.

Ronin’s place in the Ethereum scaling race

The Ronin upgrade comes as a new class of Ethereum scaling chains, called layer 2 rollups, are aiming to solve some of the same goals that the gaming-focused Ronin chain initially set out to achieve: lower fees and quicker transactions. Some of these chains specifically target gaming as a potential use case.

These networks have systems, moreover, that will eventually allow them to borrow Ethereum’s native security – meaning they won’t rely on the sort of cross-chain bridge technology that was targeted in last year’s Ronin hack.

Ronin’s builders say it will be a while until a game as large as Axie Infinity would be able to safely shift to one of these more cutting-edge scaling chains, however. “They're the innovators when it comes to doing the work that will get us to a more decentralized and scalable future,” said Zirlin. “But there's still work to be done. It's not a solved problem.”

Zirlin noted that Sky Mavis worked to reimburse users of last year’s hack (albeit a few months later, at discounted crypto values) and took other technical steps – beyond upgrading Ronin’s consensus mechanism – to prevent similar attacks from taking place in the future. “We've also hardened Sky Mavis's internal security measures, increased the headcount of our security team, and upgraded our on-chain monitoring,” he added.

Moving beyond Axie

Sky Mavis has worked over the past year to expand the Axie ecosystem past its original playing-card-style video game, which has seen a huge hit to its popularity over the past several months. (The game had 400,000 active users in the past 30 days, compared to nearly 3 million users during its 2022 peak, according to ActivePlayer.)

The player decline can be traced, in part, to the wider crypto market crash, which took a pounding on Axie’s in-game economy. But Sky Mavis might also have itself to blame for Axie’s falling user count; while the game has a dedicated fanbase, it has long faced criticism from players who say its once-lucrative “play-to-earn” mechanics masked dull gameplay and an exploitative economic model.

Sky Mavis has worked to improve upon Axie’s core gameplay over the past year with big upgrades and new game modes, but the long-term vision for Ronin always involved expanding beyond the Axie IP.

The new teams building games on Ronin include Tribes Studio, Bali Games, Directive Games and – studios that staff alums of DICE, LucasArts, Square Enix, and Ubisoft among other AAA game-makers.

“Selected partner studios have the opportunity to access Axie IP for their titles or build entirely new games with distinct IP on top of Ronin.” Sky Mavis explained in a statement.

“We're really building out this ecosystem of infinite experiences,” said Zirlin. “With this upgrade to Ronin and the announcement of these game studios, we're showing that we're expanding the Axie universe. We're also now going beyond Axie, to incubating and really becoming this launchpad for the best and most thoughtful web3 gaming experiences.”

CORRECTION (March 30, 2023 10:08 UTC): A previous version of this article misidentified Machines Arena, a video game, as a game studio.

Edited by Bradley Keoun.


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Sam Kessler

Sam is CoinDesk's deputy managing editor for tech and protocols. He reports on decentralized technology, infrastructure and governance. He owns ETH and BTC.

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