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‘Is my money gone?’ A Thriving Crypto Community Responds to a $600 Million Heist

When Logan Evans discovers that Axie Infinity – a popular online game in which players can earn cryptocurrency – has fallen victim to one of the biggest digital thefts of all time, he worries worry that I have lost everything.

“My first reaction was ‘holy —, has my money run out? Evans, 24, told NBC News.

Evans has spent the past eight months building his team of Axies, cartoon monsters that many (including Evans) compare to Nintendo’s popular Pokémon franchise, in which players pit their candy-colored monsters against each other. But what sounds like a relatively simple game has emerged as one of the most popular and lucrative of the so-called games for money. Axie Infinity’s website boasts that its marketplace has racked up $3.6 billion in transactions and the game has attracted with about 2 million daily users.

But that economy was rocked in late March when it was unspecified hackers stole assets worth about 625 million dollars from a subsidiary of Vietnamese game studio Sky Mavis, which operates Axie Infinity. The company swear to refund the lost money, and Sky Mavis said on Wednesday that it has raised $150 million from investors to help give back to its players.

While Evans didn’t directly lose any money as a result of the hack (he kept the same amount of in-game currency as before the breach), he and the other players cannot withdraw cryptocurrency from the game while Axie Infinity and law enforcement investigated the hack and determined that its network was stable.

Evans said he was disappointed with what he saw as a slow response from the company, which first admitted the violation six days after the theft.

Evans, who lives in Missouri, says: “I think that’s the worst part. “Negligence to not hear about it for six days.”

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Axie Infinity is one of those money game uses blockchain technology to create a system that can track and reward players. These games have been seen by some crypto advocates as the future of online gaming, giving players a stake in the success of the games they play.

But the complexities of costs, benefits, and risks of decentralized blockchain technologies — and in particular the centralized platforms built on top of them — have become apparent over the past year thanks to a series of premium hacks.

Axie Infinity’s problems began when it created its own blockchain, the Ronin Network, to avoid the expensive transaction fees that can come from using Ethereum, the most popular blockchain for money-making games.

Having its own blockchain allows the company to create a digital token, which is then backed by ether, the cryptocurrency of the Ethereum blockchain. Those two currencies are connected by what is known as a cross-chain bridge, which allows users to exchange ether for Axie Infinity digital tokens and vice versa.

Max Galka, CEO of forensics firm Elementus and forensics firm Elementus, said the risk of hacking “increases exponentially” the moment crypto assets are traded from a secure blockchain like Ethereum and pour into a cross-chain bridge like Axie Infinity’s Ronin network. In the case of Axie Infinity, hackers were able to break into the company’s systems by compromise with Ronin. The hackers were then able to move ether and another digital currency out of the company’s account.

Sky Mavis did not respond to NBC News’ request for comment.

As for the future of Axie Infinity after fending off the hack, Galka said it’s constantly surprised to see “how resilient this ecosystem is to events like this.

“Historical hacks, as large as they can be, don’t really scare people off,” he said.

Axie Infinity players who spoke to NBC News confirmed that they are not ready to give up the game.

Ansel Gravelle is part of a group of Axie “managers” who have established the equivalent of a small business on the platform, complete with a network of players – or “scholars” – who use your digital assets to play Axie Infinity and other games- money games. It’s a win-win situation for those who can’t afford to play Axie Infinity, requiring users to purchase three non-fungible token (NFT) creatures called Axies; They start around $16but it’s not uncommon for players spend up to $1,000 to build a team.

News of the hack surprised 24-year-old Gravelle, but he said he was able to “see the bigger picture” and didn’t feel fear or panic.

“I think that’s one of the things that shows we’re new and early on in this space,” says Gravelle. “I don’t intend to sell anything. If anything happens, I will wait and see what downside this fear brings… and try to take advantage of some possibly lower asset prices. ”

Gravelle’s faith could be rewarded, as Axie Infinity has promised to make players whole. He currently helps run a network of about 1,300 players, with most of them playing from the Philippines, Brazil and across Africa, with whom he shares the profits.

Gamers earn “Smooth Love Potion” or SLP tokens as rewards as they play, which can then be sold for cryptocurrency. The value of those tokens compared to ether crashed in recent monthswhich means that players now earn much less than before.

“They really are like employees. They can play and earn some cash,” Gravelle said. “You only play the game a few hours a day, and if you make $10 you keep $6 and I keep $4. That’s how it works.”

It has become a lucrative business model, Gravelle said, allowing him to make more money from his six-figure consulting business last year.

Even casual players still participate in the game. Akhil Jindal, 29, who started playing Axie Infinity last June, said the game and its community still draw big but the hack raised a warning.

“The community is strong and with their continued support, Axie will continue to be successful,” Jindal said. “But anyway, there are really important lessons to be learned in terms of decentralization and security.”

Both Jindal and Evans have said they have not lost faith in Axie Infinity or its creators and have no intention of giving up on the game anytime soon.

“I still trust Axie Infinity,” Evans said. “I still love everything about this space.”

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at Blogtuan.info – Source: nbcnews.com – Read the original article here

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