Ronin Network Paused After Upgrade Allows Attackers to Drain $12 Million

Ronin, the gaming-focused Layer 1 blockchain developed by the team behind Axie Infinity, suffered a $12 million exploit early Tuesday that forced the team to shut down the network temporarily.

After an upgrade was implemented earlier today, attackers were able to fool the Ronin bridge into misinterpreting the operators’ vote threshold required to withdraw funds. This allowed the attackers, which the team considers to be white-hat hackers and who are allegedly responding in good faith, to drain 4,000 ETH, or nearly $10 million, and $2 million in USDC.

Notably, the RON token ignored the news and spiked 6% to $1.4 today. Investors appear to be fading Ronin, with the network’s market cap sitting at $475 million, a dizzying 65% drop from its May peak of $1.3 billion.

The $12 million drained is the upper limit for withdrawals permitted by the bridge.

“Earlier today, we were notified by white-hats about a potential exploit on the Ronin bridge,” wrote the Ronin team on X. “After verifying the reports, the bridge was paused approximately 40 minutes after the first on-chain action was spotted.”

The team added that they are negotiating with the responsible parties, and that “regardless of the result of negotiations, all user funds are safe, and any shortfalls will be re-deposited into the bridge when it opens up.

White-hat hackers refer to individuals or entities that attack protocols in order to identify vulnerabilities so they can be fixed before malicious actors (also known as black-hat hackers) can exploit them. In the majority of such cases, the white-hats return the stolen assets in exchange for a bounty.

Ronin has been the target of attacks in the past. In March 2022, it suffered the largest DeFi exploit to date, when hackers drained it of more than $600 million.