Ronin Network Bridge Hack, Again

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TL;DR

On August 6, the Ronin Network experienced a $12 million exploit due to a failure in contract upgrade implementation. Although the response was quicker than previous incidents, reliance on luck rather than robust security measures highlighted ongoing vulnerabilities. A $500,000 bounty was offered for white hat hackers, and an audit is planned before the bridge reopens.

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The Ronin Network bridge suffered a $12 million exploit due to a critical error during a contract upgrade.

For the Axie Infinity community and Ronin Network users, the mention of a "bridge exploit" likely brings back painful memories.

After the massive $624 million hack in March 2022, many believed those dark days were over.

However, on August 6, Ronin faced another attack, reopening old wounds.

Although the financial damage was smaller this time, the psychological toll remains significant.

It's as if the crypto world is watching a horror movie sequel, wondering whether Ronin has learned from its past mistakes or is destined to repeat them.

As Ronin falters once more, one has to ask: how many wake-up calls does a project need before mastering the basics of operational security?

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Just when it seemed safe to trust the Ronin bridge again, history repeated itself in a smaller but equally concerning way.

On August 6, the Ronin Network—already infamous for the largest hack in crypto history—fell victim to another exploit.

This time, the loss was $12 million, significantly less than the $624 million theft in 2022, but no less humiliating for a project that should have learned from past mistakes.

It’s almost as if the Ronin team decided to revive their horror story with an unwanted, low-budget sequel.

As the saying goes, "Fool me once, shame on you. Fool me twice, shame on me."

But what can be said when a project is fooled twice by similar mistakes?

Perhaps a new saying is in order: "Hack me once, shame on the attacker. Hack me twice, shame on my operational security."

Acting swiftly, Chaofan Shou, like a digital Paul Revere, was the first to raise the alarm on X, warning the community that the Ronin bridge was once again under attack.

Unlike the six-day delayed response during the previous incident, this time the Ronin team was quicker to react.

Psycheout.ron, Ronin’s COO, promptly addressed the situation after the exploit was detected.

"The Ronin Network bridge has been paused while we investigate a report from whitehats about a potential MEV exploit. The bridge currently secures over $850M, which is safe."

Roughly three hours later, the official Ronin Network account confirmed the exploit, explaining that white hats had alerted them and that the bridge was paused 40 minutes after the first on-chain activity was observed.

They disclosed that the attackers had managed to withdraw nearly 4,000 ETH and 2 million USDC, totaling around $12 million—the maximum limit allowed per transaction, a safeguard that fortunately prevented more extensive losses.

As with many crypto breaches, the details proved to be the downfall—in this instance, during the upgrade process.

Verichains identified the root cause of the exploit: a failure to properly initialize a critical parameter during a contract upgrade. Here's how the incident unfolded.

The Significant Upgrade: On August 6, the Ronin team rolled out an update to their bridge manager, transitioning from version 2 to version 4.

This upgrade introduced a new implementation contract, MainchainGatewayV3, which had been deployed just six days earlier.

The Ronin upgrade hub outlined the changes in this new implementation, including adjustments to how the contract manages operator weights and withdrawal submissions.

The Major Oversight: In their haste, the team called the initializeV4 function but failed to execute the initializeV3 function. This seemingly minor omission turned out to be a costly mistake.

The Unforeseen Result: The _totalOperatorWeight variable was left uninitialized and automatically set to zero. This oversight effectively disabled the minimumVoteWeight parameter, a critical component for ensuring proper cross-chain verification.

The Breach: With security measures effectively bypassed, the vulnerability became an easy target. An MEV bot exploited the flaw, preempting any manual attempts and channeling the stolen funds to its own address.

The Response: Due to a daily withdrawal cap, an additional $72 million was safeguarded from theft. The Ronin team succeeded in pausing the contract roughly 38 minutes after the breach started.

In a surprising twist, the stolen assets were rapidly returned, thanks to exceptionally fast-acting MEV white hats who outran potential malicious actors.

The ETH, worth around $10 million, was swiftly sent back to the Ronin team, with the remaining USDC following soon after.

In recognition of their alertness and ethical conduct, the Ronin team announced a $500,000 reward for the white hat hackers who helped mitigate the situation.

Ronin also declared that the bridge will undergo a thorough audit before it is reopened and that the team plans to transition away from the current operational framework.

A detailed post-mortem is scheduled for next week, which will provide deeper insights into the technical aspects of the incident and the preventive measures being planned.

This episode underscores the risks associated with upgradeable contracts and the necessity for precise implementation.

Ronin's mistake transformed a routine update into a $12 million lesson in humility.

The question remains: how many more wake-up calls will a project endure before users decide it's time to find a safer alternative?

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Despite their quicker response, Ronin’s failure to properly implement and test their latest upgrade highlights ongoing issues with basic security practices.

They narrowly avoided a larger disaster thanks to the timely intervention of MEV white hats, but relying on luck is not a viable security strategy.

Given that this project has already endured the largest hack in crypto history, this close call should serve as a crucial wake-up call.

It's time for Ronin to prioritize rigorous security measures over hasty updates.

Going forward, Ronin—and all blockchain projects—should:

• Conduct comprehensive tests for contract upgrades.

• Work closely with auditors to ensure correct deployment.

• Exercise caution with the Initializable contract from OpenZeppelin, fully understanding its potential issues.

The Ronin Network teeters between potential redemption and lasting infamy.

In an industry where reputation can shift as rapidly as the assets it manages, how many more close calls can a project withstand before users decide to move on to safer alternatives?

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