IIn feudal Japan, the term ronin was used to describe a masterless Japanese samurai. Left alone due to the death of his lord or the loss of his privilege, a ronin was a warrior adrift, roaming free, free from the restraints of loyalty. Expressed by two characters that literally mean floating and man, the term in Japanese culture evokes a sense of tragedy and failure, a dishonored entity on the margins of society. Today, the Japanese use it to describe students who failed their college entrance exam and have to try again, living without a teacher until they pass.
This is where the Ronin blockchain got its name. Built and owned by Vietnamese game development studio Sky Mavis, Ronin is a sidechain or parallel network to Ethereum designed specifically to overcome the scaling challenges faced by the developer’s first blockchain game, Axie Infinity. Sky Mavis founder Trung Nguyễn created it after the original Ethereum scaling app Axie was built on, the Loom network, left the gaming business to focus on blockchain. business instead.
Leah Callon-Butler is a CoinDesk columnist and director of Emfarsis Consulting.
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What Nguyễn and his team built was a sturdy side chain, which has proven independent and impenetrable so far. Unlike the traditional trope, however, Nguyễn’s Ronin could never go it alone, as its users still need to be able to interact with other blockchains. As such, it was the “bridge” that connects Ronin to the Ethereum mainnet that was mined for 173,600 Ether (ETH) and 25.5 million USDC with a total value of over $625 million at the time of last month’s attack, one of the biggest crypto heists to date.
While the attack was obviously a direct hit on Sky Mavis, its wider implications demonstrate how these floating protocols are in fact deeply connected by a common membership in the decentralized ecosystem and the universal need for interoperability. If they respond in solidarity, this crisis can be reframed as an opportunity for the community to build back better together.
Yes, one of those times when you see the neighbors house burning and decide to check the batteries in your smoke detector.
— Ryan G (@Ryanmatter) March 29, 2022
See also: Thousands of Ethers from Ronin Exploit Moved to Tornado
“I was shocked and sad, but immediately calmed down because this is the only way to get through this effectively,” Nguyễn told me on Discord, when I asked for his immediate reaction to the hack. The company has since announced a $150 million funding round led by Binance which, combined with funds from Sky Mavis’ balance sheet, will be used to reimburse all users affected by the Ronin Validator Hack. This kind of emergency funding must be a huge relief for a founder at the center of one of the biggest blockchain-based heists in history, but even before he had that guarantee, Nguyễn kept his cool. .
“We plan carefully, overcommunicate, and solve one thing at a time; each of us should be the person others can rely on emotionally and logically,” Nguyễn said. I got to know him quite well last December, when I profiled him for CoinDesk’s Most Influential Series of 2021, and I can say that answer is the deeply analytical and process-oriented Nguyễn.
By suppressing emotions and “over-communicating every step” with each other, Nguyễn said his colleagues are able to feel a greater sense of control and become a source of reliability for others. From there, a sense of confidence builds throughout the team, he said.
Despite all the recent challenges, Sky Mavis continues to push forward with the launch of their new game, Origin, which is an evolution of their first release. The mood in the Vietnam office right now is one of stoic determination, Nguyễn told me.
“We were hesitant that we didn’t have enough resources to support Origin’s launch and scalability,” Nguyễn admitted. “However, we trust the incident and Origin teams to handle any issues that may arise,” he said. Some might say that Nguyễn has nearly impossible standards; he has taken years to build a star team that he feels he can trust and rely on.
After news of the hack broke, my Twitter feed lit up. Full of obvious backers came out to show their support for Axie’s core team, but it was Axie’s competitors who really set the tone. Corey Wilton, creator of the popular blockchain game Pegaxy, tweeted that he felt “very very sad” and acknowledged the immense pressure on the Sky Mavis team.
Robbie Ferguson, co-founder of Immutable X, a layer 2 scaling product for Ethereum that rivals Ronin in the blockchain gaming space, tweeted that his thoughts were “with Axie as well” and that he was confident they would recover from the crisis.
Kieran Warwick, co-founder of the upcoming game Illuvium, which is built on Immutable X, was particularly vocal review of Axie Infinity in the past. But at the news of the hack, he ditched his competitive streak to show camaraderie instead. “The competition is great, but nobody likes to see something like that happen,” he said. tweeted.
I would like to thank all of the community members, friends and partners who have personally reached out, offered support and sent blessings to me and the Sky Mavis team over the past few days. /1
— Trung Nguyen (@trungfinity) April 5, 2022
See also: Sky Mavis Wins $150 Million Round Led by Binance
It’s a stark contrast to recent times, where the Axie FUD was sometimes deafening. Along with the spectacular crash of SLP, Axie’s in-game reward token, from an all-time high of just over $0.39 in July 2021 to a low of $0.015 in March 2022, we have witnessed the general sentiment for playing – taking the game from giddy sensationalism to scrutiny.
Likewise, the headlines shifted from proclamations of poverty reduction and economic empowerment to questions of ethics and exploitation.
Today, more than 398 blockchain games are played worldwide and $5.4 billion in funding has flowed into the space, led by heavyweight VCs including Andreessen Horowitz and Sequoia. The industry has grown from a niche to a norm, with the Blockchain Game Alliance (BGA) reporting a 186% growth in its membership base between 2020 and 2021. The industry organization now has over 473 members, including game studios, blockchain protocols and individuals within the community, but before Axie there were very, very few people interested in the intersection between blockchain and games.
A whole new industry has formed around the Axie phenomenon. Even the game’s purse model – where players can rent out their Axie creatures to others – was once revolutionary, demonstrating the most interesting use case the world has ever seen in terms of the utility of non-fungible tokens ( NFT). Now the feature is basically standard across all blockchain games and underpins the whole concept of decentralized gaming guilds, a new business model that acts as an on-ramp for Web 3 newcomers who don’t own their own NFTs.
While these guilds now represent hundreds of NFT games and blockchain-based virtual worlds, they all started with Axie.
See also: To improve the crypto game, developers should look back in time | Opinion
Ronin’s feat shows that even rivals can and should set aside their differences in times of crisis. As competition fuels innovation and serves to advance Web 3 adoption, so could solidarity. A security breach is not good for anyone, and a hack of this proportion stains the entire industry, which could cause potential players, partners and investors to stay away.
Especially since it will certainly not be the last exploit; a hack like this could happen to any of us, at any time. It is a shared fear and responsibility for all of us. Some forward-thinking VCs have stepped up to help Sky Mavis this time around, but it will take more than money to ensure the future of Web 3 is safe and secure. Through true collaboration, information sharing, support and trust in other builders, the industry can and will survive.
In this way, all of us in Web 3 are ronins. While the ronin was lordless, he was never alone. The ronin banded together, bypassing traditional hierarchies of social organization to form their own decentralized, leaderless collective. Like-minded loners who failed to live up to conventional expectations, choosing instead to create their own shared spaces on the margins of society. Alone, the ronin were vulnerable, but together they became far greater than the sum of their parts. Together they – and we in Web 3 – will be stronger than before.
Thanks to Miko Matsumura and Andrew N. Green for their contribution.
Disclosure: The author owns AXS and other cryptocurrencies. The Blockchain Game Alliance (BGA) is a client of Emfarsis Consulting.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.