Axie Infinity’s Ronin Hack Exposes Risks of Proof-of-Stake and Centralization – Analysts

cryptonews.com:

The recent hack of Axie Infinity’s Ronin bridge reveals how proof-of-stake (PoS) chains still struggle with a fundamental flaw in their design, with speed and energy efficiency prioritized over security, an analyst at crypto exchange Huobi has said.

“This hack reflects the continuing challenges that blockchains and operators face in balancing user experience and security,” Huobi Research Institute head Flora Li said in a commentary on Wednesday, suggesting that the low number of nodes on the Ronin network was a fundamental problem.

Although Axie Infinity (AXS) developer Sky Mavis has “pledged to raise the number of required nodes to eight,” this is not enough, Li said. She argued that,

“It still doesn't solve the fundamental problem of how proof-of-stake blockchains can keep transactions fast, user-friendly, and energy-efficient without compromising security.” 

The analyst added that Ronin has taken “shortcuts to relieve network bottlenecks,” and said that cutting down the number of nodes on the network has made it “easier for hackers to exploit.”

The comments from Huobi’s Li came after news broke on Tuesday that the Ronin bridge, which is used to connect the Ronin network to other blockchains, had been drained by hackers for ETH 173,600 and USDC 25.5m, now worth some USD 615m.

Ronin is a sidechain to the Ethereum (ETH) blockchain developed specifically for Sky Mavis’ crypto-based play-to-earn game Axie Infinity.

Speaking on stage at the Los Angeles NFT Conference on Tuesday, Jeff Zirlin, the co-founder and growth lead at Sky Mavis, reiterated that the team is talking to law enforcement, and said some of the stolen tokens had already been sent to exchanges by the hackers.

Despite the funds already being on the move, Zirlin