Commentary: Huobi Analyst Speaks Out on $625 Million Hack

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Commentary: Huobi Analyst Speaks Out on $625 Million Hack

Yesterday it was revealed that roughly $625 million worth of cryptocurrency had been stolen from Ronin, the blockchain underlying crypto game Axie Infinity. Axie Infinity operator Sky Mavis revealed this breach on Tuesday and froze transactions on the Ronin bridge, which allowed depositing and withdrawing funds from the company’s blockchain. A hacker compromised the network nodes that validate transfers to and from the Ronin blockchain, which enabled him to withdraw funds.

On this subject, Flora Li, Head of Huobi Research Institute, commented the following:

“This hack reflects the continuing challenges that blockchains and operators face in balancing user experience and security. Axie Infinity exploded in popularity and saw a rapid influx in users on the Ronin blockchain. They took shortcuts to relieve network bottlenecks, cutting down the number of nodes that needed to be validated for transactions to just five of nine nodes, making it easier for hackers to exploit,” said Flora Li, Head of Huobi Research Institute.

“While Sky Mavis has pledged to raise the number of required nodes to eight, it still doesn’t solve the fundamental problem of how proof-of-stake blockchains can keep transactions fast, user-friendly, and energy-efficient without compromising security.”

Flora Li is the Head of Huobi Research Institute and an expert in the cryptocurrency industry. She previously worked in the fintech field and at Bank of China.

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