Sky Mavis has announced that the studio has managed to raise $150 million in funding led by Binance with participating partners. Sky Mavis is the creator of the leading NFT breakout title Axie Infinity and Binance is the world’s largest crypto exchange Binance. The funding round was also participated by Animoca Brands, a16z, Dialectic, Paradigm, and Accel. The funding will be used to reimburse user funds that were affected by the Ronin Validator Hack.
Along with the funding, Sky Mavis and Binance will also work together closely on projects that include exclusive Land sales and enable Binance login via The Mavis Hub. At this moment, Axie Infinity is the largest NFT gaming ecosystem by total traded volume. This can be primarily attributed to Sky Mavis’ underlying infrastructure which includes The Mavis Hub, the distribution platform; Ronin, the proprietary Ethereum sidechain; and Katana, a decentralized exchange for Ronin.
On March 23, 2022, Sky Mavis’ Ronin validator nodes and Axie DAO validator nodes were compromised which resulted in 173,600 Ethereum and $25.5 million being drained from the Ronin bridge. Sky Mavis details that the attack was socially engineered and a thorough investigation is currently ongoing. The root cause of this breach was the small validator set which made it much easier to compromise the network.
To future-proof the system, Sky Mavis will increase the validators within the next three months, which will be a split between various stakeholders in the Axie community and will together manage an open-source codebase. Trung Nguyen, Sky Mavis CEO commented on the issue:
Sky Mavis is committed to reimbursing all of our users’ lost funds and implementing rigorous internal security measures to prevent future attacks. With the support of Binance and other industry leaders, we will be able to quickly expand the validator set from five to 21 validators to ensure the security of the Ronin network. While we address this issue, we are also focusing on the future, starting with tomorrow’s launch of Axie Infinity: Origin. We are also thrilled to collaborate with Binance NFT on future projects.
The latest funding round along with Sky Mavis and Axie Infinity balance sheet funds will ensure that all users are able to withdraw and deposit freely. The Ronin Network bridge will open after it has undergone a security upgrade and several audits, which could take several weeks. In the meantime, Binance is supporting the Ronin Network by providing ETH withdrawals and deposits for Axie Infinity users, enabling most of them to operate freely.
Once the Ronin Network bridge is open, all individual users will be able to withdraw their funds and the 56,000 ETH compromised from the Axie DAO treasury will remain undercollateralized as Sky Mavis works with law enforcement to recover the funds. If the stolen funds are not recovered within two years, the Axie DAO will vote on the next steps for the treasury. Trung Nguyen, Sky Mavis CEO:
In order for the global ecosystem to continue thriving and maturing, it is imperative that we work together, especially when it comes to security, which is our strong suit. We have seen the tremendous work and growth of the Sky Mavis team since working together on the Axie Infinity project on Binance Launchpad. We strongly believe Sky Mavis will bring a lot of value and growth for the larger industry and we believe it’s necessary to support them as they work hard to resolve the recent incident.
Last year, Sky Mavis raised $152 million in funding in a Series B round led by the venture capital firm Andreessen Horowitz. Additional details will be revealed in the coming days.
