the big thing
About a week and a half ago, I grabbed a drink with an old TechCrunch colleague at a San Francisco party thrown by the studio behind crypto game Axie Infinity. The party boasted standard fare for a crypto get together, lots of dudes, lots of talk of NFTs and some dorky (but tasty) signature cocktails.
What’s more noteworthy about this event was what no one there was talking about.
Just one day before, a hacker breached the systems of Axie and absconded with $625 million of cryptocurrencies. No one at this party had any idea that this had happened, in fact it went undetected by the developers of Axie Infinity for six days.
Sophisticated heists are a frequent occurrence in the crypto world, a million here, ten million there. But last week’s Axie’s hack (specifically the Ronin network that underpins Axie’s economic engine) set a record as the largest DeFi hack ever.
There’s something a bit more problematic than usual with this one — beyond the outsized dollar sum.
“Play-to-earn” as an idea has been fairly controversial both outside and inside of the crypto community. Users in these games earn in-game currency for the efforts they put into the title’s mechanics, but it’s an in-game currency that can be converted into crypto. Proponents have claimed that this could be a new future for linking developing and developed nations’ online economies. Plenty of folks in South East Asian countries have been earning a living playing Axie over the past several months and billions of dollars have gone through the ecosystem in that time.
So the issue is that this is an empire made up not only of standard crypto speculators like the ones at the networking party I went to, it’s made up of an awful lot of people who are dependent on each and every day’s wages to survive. The idea that their livelihoods could be challenged by some code vulnerabilities should have given plenty in the crypto industry pause this week. The space is courting so much investor attention because it’s early and the opportunities appear massive, but leaving users — especially poorer users and less technical ones — as beta testers of this future feels dangerous.
Axie Infinity’s developers are searching for the cyber thieves behind this most recent heist, but there’s no sign of resolution for their network yet.
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