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Animoca Brands warns Axie hack may deter VC firms from crypto

By Aaron Woolner and Carine Lee

06:11, 31 March 2022

A smartphone showing the Axie Infinity game
Animoca Brands warns Axie hack may deter VC firms from crypto – Photo: Shutterstock

The theft of about $625m from blockchain game Axie Infinity on Tuesday could deter venture capital (VC) firms from investing in cryptocurrency projects according to Animoca Brands co-founders. 

The hackers targeted the Ronin blockchain run by the firm behind the popular Axie Infinity game. In a blog post on Tuesday, Ronin said that the hackers took control of the network which enabled them to steal ethereum worth about $600m and $25.5m of stablecoin USDC. 

According to a report by Beijing-based Sina Technology News, Animoca Brands, a Hong Kong-based VC firm which invests in crypto and online gaming co-founder Yat Siu said this latest development could alter VCs firm’s attitude towards investing in the sector. 

Hackers stole $600m ETH

Ronin said that hackers were able to essentially take control of the network and send about $600m of ethereum to an anonymous ethereum wallet. The hackers were also able to withdraw about $25.5m of USD coins.

“It is a shame that it needs to happen to Sky Mavis to get global attention. But we have be more careful now.” Yat Siu said at the NFT LA conference in Los Angeles, according to a report by Sina Technology News. 

Sky Mavis, the Vietnamese makers of last year’s breakthrough success in the blockchain gaming sector, was using the Ronin blockchain to speed up transactions and reduce costs. 

BTC/USD

95,594.30 Price
+0.110% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 50.00

DOGE/USD

0.41 Price
-2.520% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 0.0020596

ETH/USD

3,602.27 Price
-0.590% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 1.75

XLM/USD

0.52 Price
-2.640% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 0.00260

Animoca looking to compensate players

According to the report by Sina Technology News, Yat Siu said Animoca Brands is in talks with Sky Mavis to compensate players who suffered losses and he declined to comment on the details. 

Yat Siu said VC firms investing in crypto companies must help with protecting their investments against hacking attacks who said it has become apparent that reviewing codes and security protocols before making an investment is now of cortical importance. 

Blockchain game Axie Infinity rose to prominence in 2021 when players in emerging economies such as the Philippines began using it in droves to make up for lost income during the Covid-19 pandemic. 

During the year it achieved revenues of $1.2bn from a user base of just 600,000 active players. Given the success of the game other developers are working feverishly to produce a mass market equivalent that eliminates the technical barriers that currently exist in participating in blockchain games. 

Follow the author on Twitter: @aroaringboy

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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