The Axie Infinity (AXS/USD) price retreated on Tuesday evening as investors reacted to the latest hack in the Ronin network. The AXS token is trading at $63, which is about 15% below the highest point this week. Its market cap has dropped to about $6.5 billion.
The blockchain industry is a fast-growing one. A big challenge in the sector is the rising number of cybersecurity issues.
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On Tuesday, the biggest hack in the DeFI industry was reported. This time, it came from the Ronin Network, which hosts Axie Infinity.
For starters, Axie Infinity is a decentralized gaming platform where people play with cards known as Axies. As the move up the ladder, they are incentivized by the Smooth Love Portion coin. The XAS token, on the other hand, is mostly used for governance purposes.
In a statement, Sky Mavis, the company that operates Axie said that hackers had managed to siphon cryptocurrency worth over $625 million. This was the biggest hack in the DeFi history.
The tokens that were stolen are those that users deposit in order to do transactions in the Axie Infnity ecosystem.
To achieve the hack, the actors used hacked private security keys to compromise the network nodes that validate transfers. The statement added:
“We know trust needs to be earned and are using every resource at our disposal to deploy the most sophisticated security measures and processes to prevent future attacks.”
So, the biggest question is what happens to the Axie Infinity ecosystem and the AXS token. It is too early to tell although the picture is not looking good for now. That’s because the hack will likely incentivize people using the platform to abandon it for safety purposes. This will lead to more weakness of the Axie Infinity price.
On the other hand, there is a possibility that these hackers will work with the network to return the funds. In the past, hackers have done exactly that. They have stolen funds and then returned them at a fee although it is unclear whether they will do that. This explains why the Axie Infinity price decline has not been that severe.
Now, turning to the four-hour chart, we see that the AXS price formed a double-top pattern. Therefore, since a double-top is a bearish sign, there is a likelihood that the coin will keep falling in the near term.
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