Cyber Security Project Management (CYBR-10011)

Mohawk College

Student Name: Hitarth Parekh

Submitted to: Prof. Priyanka Sharma

Introduction
Ronin Network is a special kind of computer network that connects to another network
called Ethereum. Ethereum is a network where you can make and use digital money
and stuff stored on computers all over the world. Ronin Network is a place for gamers
who enjoy games with digital money from Ethereum. It makes things faster and
cheaper. The people who made Ronin Network, a company named Sky Mavis, also
created a game called Axie Infinity. In this game, you gather and battle virtual creatures
known as Axies.
Ronin Network, a blockchain platform that supports the popular online game Axie Infinity
got affected by a cyber breach in March 2022. Axie Infinity is game that allows players
to collect, breed and battle virtual creatures called Axies. The Axies are represented as
non-fungible tokens (NFTs) on the blockchain. The game also enables players to earn
cryptocurrency by playing and selling their Axies.

Summary
The Ronin Network uses a group of nine validator nodes to authorize bridge
transactions, and a deposit or withdrawal requires permission by a majority of five of
these nodes. The attacker got access of four validators held by Sky Mavis as well as a
third-party Axie DAO validator that signed their fraudulent transactions. According to the
reports, attacker was able to take control of four of Sky Mavis Ronin validators as well
as a separate validator operated by Axie DAO. The hackers obtained Sky Mavis private
keys and used them to perform fake withdrawals.

The attack against the Ronin Network was done in very secret manner. In reality, the
hack wasn't discovered until six days after it had happened when a user alerted the
project staff that they were unable to withdraw roughly 5,000 ETH from the project's
bridge. The hackers pulled out 173,600 Ethereum which was worth around USD 590
million and 25.5 million USDC (USDC is one of the stable coin to buy and sell
cryptocurrencies whose value is derived from USD). The total value of these stolen
cryptocurrencies was worth around USD 615 million. This is considered as the biggest
hack in the DeFi (Decentralized Finance) world.
According to Ronin Network, the hack began in November 2021, when Axie Infinity's
user base grew to an unsustainable scale. According to the company, the rush of
gamers produced immense user load, forcing it to relax security protocols in order to
meet the increasing demand. It claims that things slowed down in December, but that it
failed to strengthen its protection, allowing hackers to exploit the unprotected nodes.

On March 29, 2022, Sky Mavis discovered the hack. As soon as it was discovered, the
company halt all services of deposits and withdrawals on the Ronin Network for a period
of 14 hours in order to launch an investigation and stop additional losses. All users were
also asked to log in again and go through a new 2FA procedure by the organization.
According to the company, no clients lost any money, and it refunded all impacted
users.

Impact of Breach
The breach had significant impact for both Axie Infinity's Ronin Network and its user
community:
 Company faced huge negative impact on its reputation and regulatory
compliance.

 Company lost user’s trust and lost many of them to other cryptocurrency
platforms.

 Users faced financial losses as a result of the marketplace's manipulation of

 The hack revealed the network's security systems weakness.

 The hack created doubt on their capacity to safeguard the assets of its users.

 The attack also harmed the network's reputation as a dependable and safe
platform for gaming and NFT transactions.

 Many people, including experts, said the network didn't act quickly or well when
the breach happened.

 The network also faced legal action from regulators and law enforcement for
failing to prevent or report the breach in a timely manner.
Lessons Learned
The Ronin Network attack demonstrated the significance of cybersecurity for blockchain
platforms and gaming ecosystems, as well as the necessity for improved authentication
techniques and user education. The following are some major lessons that need to be
learned from this incident:

 Companies should use stronger security methods, like codes from apps or
special devices, instead of using messages or emails that can be easily taken by
bad people.

 Companies should always watch closely for any strange activity and use special
tools to stop computer attacks.

 If something bad happens, Companies should quickly tell the police and work
with them.

 Companies should tell their customers and friends what's happening if there's a
computer attack and give updates on what's going on.

 User should turn on the special codes (2FA) for their accounts and use different
passwords for different places.

 User should know that it's not very safe to keep lots of digital money online. It's
better to use special devices or places without the internet for safekeeping.

 This situation shows us that we need to always be careful with new things in
technology to stay safe from problems that might come up.

The Ronin Network hack is a perfect example of how cybersecurity dangers inside
blockchain ecosystems are always developing. This study has given a summary of the
breach, its effects on the Ronin Network of Axie Infinity, key lessons learned, and
important resources for additional research. Organisations may gain a better
understanding of the particular difficulties and security issues presented by
decentralised apps and blockchain platforms by analysing occurrences like the Ronin
Network compromise.
References
https://www.bbc.com/news/technology-60933174
https://www.cnbc.com/2022/03/29/hackers-steal-over-615-million-from-network-running-
axie-infinity.html
https://thedefiant.io/axie-infinity-hack-600m
https://www.halborn.com/blog/post/explained-the-ronin-hack-march-2022
https://www.cnn.com/2022/03/29/tech/axie-infinity-ronin-hack/index.html