Ronin sidechain relaunch: what happened?

29.06.2022

Intermediate

On 28 June 2022 the Ronin sidechain was successfully restarted. The network had been offline for several months after a large hack of its cross-chain bridge in late March. The attackers stole cryptoassets worth $625m. This article sets out the key facts about Ronin and its relaunch.

Why was the Ronin sidechain needed?

Ronin is a project by Sky Mavis, the company behind the popular blockchain game Axie Infinity. The app initially ran on Ethereum, but its throughput was insufficient to handle in‑game operations.

Sky Mavis then built a layer‑2 solution—the Ronin sidechain. The link between it and Ethereum was the cross-chain Ronin Bridge, which allowed ERC‑20 assets to be moved into Axie Infinity.

In 2021 the game’s popularity surged: from May 2021 to January 2022, 1.44m buyers carried out roughly 12.6m transactions in non-fungible tokens (NFTs).

Axie Infinity became the outright leader by NFT trading volume: in 2021 its turnover is estimated at $3.5bn to $3.85bn, whereas its nearest rival, NBA Top Shot, managed just $827m.

Amid the frenzy, the sidechain bet paid off. By some estimates, in November 2021 alone Ronin processed more than 560% of Ethereum’s transaction count.

Ronin’s speed was roughly four times that of Ethereum. Thanks to Ronin, trades on the Axie marketplace and asset transfers settled within seconds.

Ronin also mitigated high fees. Gas on Ethereum often ranged from $100 to $200, making microtransactions uneconomic.

In addition, users of the official Ronin Wallet received a set number of free transactions for various actions in Axie Infinity, as well as for holding Axie NFTs or virtual land plots in the wallet.

How was Ronin hacked?

In late March 2022 the Ronin sidechain used by Axie Infinity fell victim to one of the largest hacks in the history of decentralised finance (DeFi).

Exploiting a vulnerability, the attackers withdrew cryptoassets worth over $625m: 173,600 ETH and 25.5 USDC.

The developers discovered the security breach only a week after the attack. They found that a team member had been hit by a phishing attack, allowing the perpetrator to access the company’s infrastructure and Ronin validators.

Ronin ran with just nine validators. Only five signatures were required to approve a transaction. At the time of the attack Sky Mavis controlled four of the nine validators. Control over one more validator, operated by Axie DAO, was gained via a backdoor related to a gas‑free RPC node on Ronin.

Such an architecture ran counter to basic security principles. In blockchains, validator nodes are typically run by different teams or firms to preserve a distributed structure. Ronin’s creators used a centralised approach—a significant share of validators belonged to one company. That proved a fatal error.

Does Ronin have its own token?

In early 2022 Sky Mavis launched the RON token. It is designed for project governance and is used for transactions on the Ronin network. After the hack, RON’s price fell from $2.3 at the end of March 2022 to $0.2 by late June.

After the relaunch was announced, RON rose by roughly 40% over the week and reached $0.36 by the time of the event. Observers, however, note the steady decline in revenues at the Axie Infinity game that uses Ronin and poor tokenomics for the project.

Which applications ran on Ronin?

Beyond Axie Infinity, the sidechain’s main application was Ronin Wallet, which allowed users to store game‑related cryptoassets. The ecosystem also included the decentralised exchange Katana (Ronin DEX), where in‑game currencies could be swapped.

What changed after the relaunch?

The game’s developers restarted Ronin after upgrading security and conducting several rounds of audits on the Ronin Bridge code. They also introduced new safety mechanisms, in particular an automatic “off switch” that halts the bridge when someone attempts a suspiciously large swap. A withdrawal limit of $50m per day now applies to Ronin Bridge.

Immediately after the incident Sky Mavis raised the number of validator signatures needed to confirm transactions on Ronin. The company pledged to decentralise the network and raise the number of active nodes to 100, and to implement a zero‑trust architecture.

Following the relaunch, Ronin Network introduced a body of “governors” to vote on adding new validators, upgrading smart contracts, changing the bridge’s daily limit and other major changes to the blockchain.

One of the most important elements of the relaunch is compensation for stolen funds. Back in April the Ronin team raised $150m for this purpose. Sky Mavis promised to pay a further $450m from its own funds.

As stated in the relaunch announcement, all users’ stolen wETH and USDC were returned and are fully collateralised on Ethereum. The fate of another 56,000 wETH stolen from the Axie DAO treasury remains unknown—they expect to recover them through law‑enforcement investigations.

How to move assets from Ethereum to Ronin?

The cross-chain bridge for Ronin is already operational. It allows transfers from Ethereum to Ronin of ETH, AXS (the ecosystem’s native coin), SLP (Axie Infinity’s main in‑game asset) and the USDC stablecoin. You will need a browser wallet that supports Ethereum, as well as Ronin Wallet.