Axie Developer Raises $150 Million as Gamers Flee After Hacking
(Bloomberg) -- Sky Mavis, the developer of the popular play-to-earn Axie Infinity video game that lost about $625 million in a hack last month, raised $150 million to help stem an exodus of players after they were unable to access gaming proceeds.
The money will be used to partially reimburse participants and enhance security measures. Binance, the world's largest cryptocurrency exchange and one of the primary trading platforms for the digital tokens used in conjunction with the game, led the funding round, the companies said in a statement Wednesday. Other participating investors include the gaming and blockchain company Animoca Brands, the venture capital firm Andreessen Horowitz, Dialectic and Paradigm.
The capital will be combined with funds from balance sheets of Vietnam-based Sky Mavis and Axie Infinity, and used to make sure the users affected by the hack of a software bridge known as Ronin that allowed participants to use tokens from different blockchains. The funding raised is only a third of the capital lost during the hack.
“Sky Mavis is committed to reimbursing all of our users' lost funds and implementing rigorous internal security measures to prevent future attacks,” Trung Nguyen, chief executive of Sky Mavis said in a emailed statement.
The Ronin Network is increasing the number of validators that handle transactions to 21 from 5 to bolster security.
Binance is supporting the Ronin Network by providing Ether withdrawals and deposits for Axie Infinity users. It is expected the Ronin bridge will open once it has undergone a security upgrade and several audits, which can take several weeks.
Since disclosing the hack, Axie Infinity had to restrict the ability of players to move digital money out of the virtual world and has seen the number of daily active users decline. Sky Mavis has stressed it remains committed to reimbursing players as soon as possible.
The 56,000 Ether taken from the Axie DAO treasury will remain undercollateralized as Sky Mavis works with law enforcement to recover the funds. If the stolen funds are not fully recovered within two years, the Axie DAO will vote on next steps for the treasury.
In the meantime the hacker behind the Ronin attack moved 1,400 Ether to Tornado Cash on Monday, a crypto asset mixing services as reported by CoinDesk.
©2022 Bloomberg L.P.
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