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$625M worth of ETH drained on Axie Infinity's Ronin Network

roninblockchain.substack.com

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Re: $625M worth of ETH drained on Axie Infinity's Ronin Network

#101

Post by MattGaiser »

tomatowurst wrote: post #94
dpiers wrote: post #31

I'm out of the loop and trying to understand - people lent over half a billion dollars of their 'real' fake money (ETH) to a game studio so they could transact on the studio's sidechain because gas fees are prohibitively expensive on ETH, and then the game studio got hacked and lost it all? How was this ever going to end any other way? Imagine how preposterous the idea of storing $650mm in USD in a random game studio…

Here's another preposterous offering: 20% APY "risk free" from owning crypto.

They must just be loaning it out and slaying people endlessly on margin calls.

Re: $625M worth of ETH drained on Axie Infinity's Ronin Network

#102

Post by clpm4j »

Consultant32452 wrote: post #86
joering2 wrote: post #60

Earlier quoted context omitted.

when it comes to banking, random checking accounts are hacked into very rarely. to the point that in USA the FDIC is protecting your account up to $250,000. I don't recall last time seeing news on someone's bank account being hacked and drained, if anything its mostly family fraud. also there are all sorts of checks when you try to wire or withdraw more than $10,000, not to mention wire hundreds of millions. Such tra…

Wire fraud results in billions of dollars in losses per year from checking accounts. Here's one article from 2019: https://www.cnbc.com/2019/09/11/email-wire-fraud-cost-26-bil... We talk about eth/btc as if they're just covering the function of the checking account, but it's also covering the function of the checks, wire transfers, ACH transfers, etc. So for a real comparison you'd have to count up all the related fr…

This article is about people being fooled into wiring money to fraudulent actors, not about hacking.

Re: $625M worth of ETH drained on Axie Infinity's Ronin Network

#103

Post by gitfan86 »

horsawlarway wrote: post #42
arcticbull wrote: post #32

Earlier quoted context omitted.

I mean we have an answer to that, it's called the law, and its worked since 1750BC. [edit] This guy, Hammurabi - king of the First Babylonian Dynasty - faced a similar quandary, so there's some prior art. Disputes under the law are resolved in court.

No one in crypto typically wants to acknowledge this, but this is the clear and robust answer. Your keys your coins is obviously a situation rife for unreconcilable fraud, and is not a functional solution for anyone who might - ya know, want to spend these things as a currency.

Same thing as "code is law". If a restaurant puts their ordering process on a smart contract and someone orders -1 packets of hot sauce and that rolls over to 2 billion packets that means the restaurant has to provide 2 billion packets of hot sauce to the customer?

Why does that sound like a good situation to anyone?

Re: $625M worth of ETH drained on Axie Infinity's Ronin Network

#104

Post by gear54rus »

mabbo wrote: post #47

In a system run by people, the transaction could be reversed, traced, and the culprits eventually brought to justice. In a system run by algorithms, designed to avoid oversight by people (governments), there is no such powers. There's no reversal. There's no checking the name on the account the transfer was to. It's just gone. I do not understand why people who have legal intentions would want to be part of the crypt…

You confuse legal with right. When the government is out for your money, crypto can be a life saver (as the recent russian example shows).

So maybe you shouldn't dismiss it so quickly just because it never happened to you.

Re: $625M worth of ETH drained on Axie Infinity's Ronin Network

#105

Post by elif »

gen220 wrote: post #69

Question for the legal-minded folk here. Is this "theft" illegal in the criminal sense? It's exploiting an unintended hole in software, but it's technically following the smart contract faithfully, albeit against the better intentions of its author(s). Has a smart contract case like this been litigated before? It brings to mind comparable things that have happened in the financial services world, where one party insi…

The attacker gained control of 5 validator nodes. This is as clearcut as hacking and theft charges can get.

Re: $625M worth of ETH drained on Axie Infinity's Ronin Network

#106

Post by lolinder »

gitfan86 wrote: post #68
dpiers wrote: post #31

I'm out of the loop and trying to understand - people lent over half a billion dollars of their 'real' fake money (ETH) to a game studio so they could transact on the studio's sidechain because gas fees are prohibitively expensive on ETH, and then the game studio got hacked and lost it all? How was this ever going to end any other way? Imagine how preposterous the idea of storing $650mm in USD in a random game studio…

At least with a checking account you may be able to have the transfer reversed. The idea of buying game credits and trading them in game makes sense, but you would want the game publisher to have root on the ledger so that if there was a hack they could reverse it.

> but you would want the game publisher to have root on the ledger so that if there was a hack they could reverse it.

In other words, you'd want the game publisher to run their game on a centralized database, like MMOs have been doing for decades.

Re: $625M worth of ETH drained on Axie Infinity's Ronin Network

#107

Post by noasaservice »

arcticbull wrote: post #32
RL_Quine wrote: post #26

Earlier quoted context omitted.

What is your threshold? Who decided what is "not legitimate" activity? Clearly in this case the money was spent using the keys that were allocated to be able to control the money, what process overrides that?

I mean we have an answer to that, it's called the law, and its worked since 1750BC. [edit] This guy, Hammurabi - king of the First Babylonian Dynasty - faced a similar quandary, so there's some prior art. Disputes under the law are resolved in court.

Hammurabi's laws only work when they have a monopoly on violence to enforce said laws.

Shitcoins (all of them) remove the potential of violence as a means of corrective action. Instead, you have crazy hard math stopping you. Can't do the math? Then you're not forcing your decision.

Re: $625M worth of ETH drained on Axie Infinity's Ronin Network

#108

Post by ohgodplsno »

gonehome wrote: post #50
shakezula wrote: post #30

Earlier quoted context omitted.

You’re describing a hard fork - exactly what created Ethereum and Ethereum Classic after the DAO hack. Even now it’s still considered a controversial move.

I think the majority sided with the move (which is why Ethereum soldiers on and EC is basically useless). It's a good final social check on bad behavior. I think Vitalik as written about this (I'm pretty sure I read about it in one of his long form posts).

>I think the majority sided with the move (which is why Ethereum soldiers on and EC is basically useless).

Hahaha, no, the wealthy sided with the move. Of the 82,054,716 ETH in existence, only 4,542,416 voted, for a total voter turn out of 5.5% of the total supply on 16 July 2016; 3,964,516 ETH (87%) voted in favor, 1/4 of which came from a single address, and 577,899 ETH (13%) opposed the DAO fork.

Vitalik and his friends stood to lose a lot of money, and being the biggest players in town with their premined shitcoin, voted against them losing money.

Re: $625M worth of ETH drained on Axie Infinity's Ronin Network

#109

Post by jokoon »

mabbo wrote: post #47

In a system run by people, the transaction could be reversed, traced, and the culprits eventually brought to justice. In a system run by algorithms, designed to avoid oversight by people (governments), there is no such powers. There's no reversal. There's no checking the name on the account the transfer was to. It's just gone. I do not understand why people who have legal intentions would want to be part of the crypt…

Because it's cool money, and because it's a legal gray area.

I can't wait for the law to change.

At some point there will be a tax for receiving and sending dollars to a blockchain converter, or it will require some heavy regulations and control, and then maybe things will improve.

Unless people understand the Blockchain is used to launder money, nothing will change.

Re: $625M worth of ETH drained on Axie Infinity's Ronin Network

#110

Post by px43 »

onebot wrote: post #38

It is amazing to me that these bridges can't figure out a reliable auditing mechanism. I can't wait to learn about how this was accomplished. But with the amount of money at risk, it seems like there has to be a mechanism to secure these things and maybe have a backstop in the even something does go wrong.

Lots have bridges have figured out good auditing mechanisms, and have built in fail-safes, circuit breakers, daily limits, etc. Those aren't the ones in the news for getting hacked though.
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