$625M worth of ETH drained on Axie Infinity's Ronin Network
This is the kind of pain that comes from trusting scammers and nincompoops about unworkable blockchain &quot;scalability&quot; fixes.<p>Here&#x27;s the sequence. Those dumb enough to ignore it are doomed to repeat the pattern. I&#x27;m probably getting some details wrong in this Rube Goldberg scheme, so feel free to correct.<p>1. Citing &quot;Ethereum network congestion,&quot; Axie Infinity announces an ethereum side chain, Ronin.[1]<p>2. Ronin was a centralized server (therefore fast and cheap) authorized to make Ethereum Mainnet transactions. The server was a hot wallet in other words.<p>3. The Ronin team tried to make it look like they were &quot;decentralized&quot; by splitting signing authority among 9 &quot;validator nodes.&quot; (the article)<p>4. An attacker obtained 5 of 9 keys, which is the signing threshold.<p>5. With the required threshold of keys, the attacker signed the transitions moving assets off the Ronin servers.<p>None of this is new. The Bitcoin &quot;block size war&quot; was fought over this very point. Unworkable scaling schemes are going to end in disaster with no fallback, and no recourse for those who lose money. You end up with nothing, and will be sad.<p>And it&#x27;s sad that the same lessons keep getting replayed over and over. It&#x27;s really simple. Can your &quot;blockchain&quot; be validated with regular hardware? Does it use a secure consensus algorithm? Is there a secure side channel through which low-value transactions can flow? If not, you&#x27;re going to have a bad time when the shenanigans start happening.<p>Now, is that side channel effectively a single server? Handling hundreds of millions of dollars of value? Have they rolled their own crypto? If yes to any of these, get out and stay out.<p>[1] <a href="https:&#x2F;&#x2F;medium.com&#x2F;axie-infinity&#x2F;introducing-ronin-axie-infinitys-ethereum-sidechain-8745e31eaef1" rel="nofollow">https:&#x2F;&#x2F;medium.com&#x2F;axie-infinity&#x2F;introducing-ronin-axie-infi...</a>