Mixin Network Loses $200 Million in Hack: What You Need to Know

September 25, 2023

Centralized data storage of the 6th largest decentralized network hacked!

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Mixin Network Loses $200 Million in Hack: What You Need to Know

Another scam in crypto resulted in millions of dollars lost.

This sucks, obviously.

I’m sure if you’re working with the tech behind the network architecture, every vulnerability is a learning opportunity.

But I think, even for non-technical people, there’s a lot to learn from such attacks.

Let’s look at this one.

What Happened:

Mixin Network confirmed a loss of $200 million in crypto assets over the weekend.

The culprit?

A compromised cloud service provider.

Yes, the weak link was a centralized cloud service.

What is Mixin?

Mixin is a public distributed ledger to allow any public distributed ledger to gain

  • trillions of TPS,
  • sub-second final confirmation,
  • zero transaction fee,
  • enhanced privacy, and
  • unlimited extensibility.

In simple terms, it’s a free and lightning-fast peer-to-peer transactional network for digital assets.

Key points:

  • Mixin is the 6th largest blockchain network with a TVL of $395M.
  • 663K monthly BTC transactions and 180K ETH transactions in July

The hack: A case for stronger decentralization?

The hack exposes a critical vulnerability in Mixin's infrastructure, particularly since the platform champions itself as decentralized.

They also claim to be safe for moving digital assets against different possible attack vectors.

As mentioned by a user, most web3 services use a centralized cloud operator for customers’ data storage.

Even though it’s not clear yet how the attack happened, it’s clear that this will force a re-evaluation of the security of other protocols.

We’ll have to re-examine if decentralization is even more important at the network level.

Market Impact:

Mixin's founder, Feng Xiaodong, stated in a livestream that they can currently secure only half of the stolen assets.

As a result, Mixin has temporarily suspended all deposits and withdrawals to address vulnerabilities.

The native token of Mixin, XIN, plummeted by 8.6% following the news.

The hack is a significant setback for a platform that had amassed over $1 billion in total value since its 2017 launch.

Proof of Play: $33M

The crypto gaming studio Proof of Play raised $33M in a seed round, with investors including a16z crypto, Greenoaks, Balaji Srinivasan and Naval Ravikant.



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