After a big crypto hack, the creators of the Axie Infinity game raised $150 million
Sky Mavis’ backers have extended a $150 million lifeline to the blockchain-gaming startup, which was hit by one of many largest-ever crypto cyberattacks last month, helping to reimburse Axie Infinity gamers for their stolen monies.
Protect users, protect projects, protect the industry. https://t.co/intrm5HgpB
— CZ 🔶 Binance (@cz_binance) April 6, 2022
On March 23, hackers stole more than $600 million in cryptocurrency from Sky Mavis’ blockchain system, the Ronin Community. Despite criticism for not discovering or disclosing the hack sooner, as well as a slowdown in customer growth that began even before the hack, Sky Mavis has raised funds from crypto exchange Binance — a new investor — and previous backers, including Andreessen Horowitz, Accel, and Animoca Manufacturers.
The majority of their $150 million in fundraising came from a secondary offering, in which Sky Mavis’ founders sold their private stock interests. Sky Mavis’ chief operating officer, Aleksander Larsen, indicated that he and his co-founders would use the proceeds from the stock sale to reimburse gamers whose payments had been stolen.
“We’re taking responsibility for this example because we believe we should have always finished higher,” he said.
According to Yat Siu, chair of Animoca, an investor in Yuga Labs, the company behind Bored Ape Yacht Membership and several other cryptos and NFT products, the “really generous gesture” has helped earn back traders’ respect. “They needed to demonstrate that they’re in it for the long haul.”
Andrei Brasoveanu, an associate at Accel, remarked that he believed the company had made the most significant moves to protect its tech platform in the future while still retaining the goodwill of many of its gamers. “The crew has been a fantastic act,” he said, “and I’ve been impressed with how they handled this.”
Customers were responsible for two-thirds of the monies lost. Around $200 million came from the Axie Infinity treasury of monster-hunting revenue, which Sky Mavis is seeking to recover with the help of law authorities.
Axie Infinity has become the most well-known blockchain-based online game globally, making it a much-followed test of the utility of non-fungible tokens and crypto assets beyond monetary buying and selling and speculation. In October, Sky Mavis raised $152 million in venture capital, valued at almost $3 billion. Larsen would not comment on the value of the company’s newest sphere.
The Pokemon-style game has sparked debate about its business model based on purchasing and training monsters that can eventually generate bitcoin. A drop in the worth of its in-game currency in recent months, owing partly to changes made by Sky Mavis to how the game works, has resulted in a sharp drop in the number of players from a peak of roughly 1.5 million late final year.
The attack occurred only days before Sky Mavis was set to debut a new version of its game, Axie Infinity Origins, which is free to play and features more polished graphics and gameplay than its predecessor. Gamers will be able to use Axie characters from the original game that they acquired as NFTs in Origins, which the developer thinks will appeal to a broader audience.
Axie Infinity: Origin is live in Early Access!
This is a very early version of the final product and we will be upgrading it quickly over the coming weeks and months.
— Axie Infinity🦇🔊 (@AxieInfinity) April 7, 2022
According to Larsen, the primary sport generated $1.3 billion in revenue last year, despite the four-year-old company’s struggles to keep up with its rapid growth.
“This assault is a direct outcome of trade-offs because we’re overgrowing,” Larsen said. “The safety and everything else around it can’t keep up with the pace.”
“Going forward, lesson learned, we’re putting safety first,” he said.