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Parmy Olson

Expensive Crypto Hacks Are Becoming Part of Web3 Life

Early adopters of decentralized finance have lost millions of dollars in multiple breaches. Who’d want to return after that?

Poly Network Photo Illustration
Photographer: NurPhoto/NurPhoto

A popular blockchain game called Axie Infinity has suffered what could well be the biggest security breach in the history of decentralized finance.

Hackers forged withdrawals last week from the game’s Ronin Network, which lost approximately $615 million and said it was working with law enforcement to recover the funds and reimburse players, many of whom had to pay hundreds of dollars up front to play. It’s unclear how many were affected. It’s also postponing the launch of a similar play-to-earn game. The incident points to a mounting challenge for web3, the catchall term describing digital services built on blockchain technology. A growing list of breaches that stem in part from errors in writing web3 code is upending one of the great promises of blockchain — enhanced security — and holding back the technology’s progress toward mainstream acceptance.