Authors: Jessy, Maxwell, Climber, Golden Finance

On September 25th, MistTrack posted on social media that Mixin Network's cloud service provider database was attacked, involving approximately 200 million US dollars. The news caused a heated discussion in the currency circle, mainly because the well-known KOL Li Xiaolai is one of the early investors in Mixin Network. In addition, Mixin Network is also a typical example of making a fortune in silence, consistently ranking in the top ten of the DeFiLlama TVL leaderboard.

Subsequently, this news was confirmed by the official Mixin Kernel on X (formerly Twitter), stating that on the early morning of September 23, 2023, Mixin Network's cloud service provider database was hacked, resulting in the loss of some assets on the main network. The team has contacted Google and the Mist team to assist in the investigation. After preliminary verification, the amount involved is approximately 200 million US dollars. Mixin Network's recharge and withdrawal services have been suspended. After discussion and consensus among all nodes, once the vulnerability is confirmed and fixed, these services will be reopened.

At 1 pm on September 25th, Feng Xiaodong responded in a live broadcast, stating that the damaged assets mainly consisted of core Bitcoin assets, and assets such as BOX and XIN did not experience serious theft. The specific details of the attack cannot be disclosed at this time. Regarding the stolen assets, the official statement indicates that currently a maximum of 50% will be compensated, and the remaining portion will be compensated in the form of bond tokens. In the future, the official will use profits for repurchase. In addition, Feng Xiaodong also mentioned that Mixin will launch a new system for user asset migration, but currently only half of the user balance can be transferred.

Friends' Entrepreneurship

It is understood that Mixin Network is a fundamental blockchain cross-chain protocol aimed at providing users with a more convenient and secure multi-currency wallet, safeguarding users' asset security. It positions itself as a free and fast digital asset peer-to-peer trading network.

According to Mixin Network's official website, its ICP filing entity is Feigeman (Beijing) Technology Co., Ltd. According to Tianyancha information, the company was established in 2014, with Feng Xiaodong as the legal representative, and the current shareholders are Feng Xiaodong (94%), Li Xiaolai (5%), and Tieling (1%). Previously, Luo Yonghao also held shares in the company. Feigeman's wholly-owned subsidiary is Wuhuaguo Adventure (Beijing) Technology Co., Ltd., in which Li Xiaolai is also a shareholder. The company's public information indicates that it is a company dedicated to providing seamless leading video services in the mobile internet field.

According to an interview with Li Lin, the chief scientist of the Mixin Network project, Feng Xiaodong dropped out of Shandong University's computer major in 2009 and later joined Google Play, becoming an early developer of Android applications in China.

Public records show that Feng Xiaodong earned his first million dollars during his student days through the development of Android and SDK. In 2011, he was invited to join a leading mobile video technology service provider in China as a technical partner.

According to Li Lin's interview, in December 2014, Feng Xiaodong left his own business and established Wuhuaguo Adventure, creating an app focused on the overseas mobile game live streaming market. In December 2014, Feng Xiaodong started his own business and established Wuhuaguo Adventure, creating an app focused on the overseas mobile game live streaming market, with investment from Li Xiaolai and his friend Luo Yonghao.

Subsequently, he began entrepreneurship in the blockchain field. The blockchain team was formed in November 2017, with a team of less than 20 people, and Mixin Messenger was launched in December, with the product having encryption social and peer-to-peer transfer functions.

On the Mixin official website, the project claims its mission is to provide convenience, security, and privacy for digital assets and messages, always prioritizing security, privacy, and decentralization in its open-source software. Ironically, the project itself has been hacked, resulting in potential losses of 200 million US dollars.

In addition, the core support team of Mixin Messenger consists of senior engineers and business experts from well-known technology and financial industries such as Weibo, Cheetah, and Kingsoft. When Vitamio SDK was released, Cool 6 authorized its use.

The behind-the-scenes team of Mixin also includes veterans of the currency circle such as Mint Capital partner Laomao.

However, in early August 2019, Mixin COO "Mint" announced her resignation from the position of Mixin Network COO for personal reasons. According to her Zhihu article, she had served as Mixin COO since June 2018.

"Earliest Investor" Li Xiaolai's Multiple Endorsements

Li Xiaolai had previously endorsed the project in public on multiple occasions. This was the first project he returned to endorse in the currency circle after claiming that he would no longer endorse currency circle projects. It is evident that Li Xiaolai also regards Mixin as his home turf.

He claimed to be "one of the earliest investors in Mixin." On Mixin Messenger, he built communities, gave lectures, and promoted the "Blockchain ETF product" BOX that he initiated to the audience. In August 2019, Li Xiaolai announced on WeChat public account that he had sold 2.8 million BOX. Initially, BOX consisted of BTC, EOS, and XIN, with XIN issued by Mixin Network.

On November 10, 2017, XIN started trading on the Li Xiaolai-affiliated exchange BigONE, with an opening price of 917 yuan on the first day. In January 2018, the price of XIN rose to 15,000 yuan, but currently, the price of XIN is only around 1400 yuan.

At the end of 2019, the BTC sign-in activity launched by Mixin Messenger was pursued by a large number of users. Signing in would earn Bitcoin, and after a year of signing in, one could receive 0.066 BTC. According to the rules, the longer the sign-in time, the more BTC one would receive. Based on the official data, signing in for 10 years could yield 6.6 BTC, with the current price, the 10-year return would exceed 300,000 yuan.

Shortly after, Mixin Messenger increased the sign-in threshold, requiring users to add KYC certification, answer questions, invite users, and even purchase certain designated products. Mixin frequently changed the sign-in rules and continuously raised the threshold, sparking dissatisfaction among some users. The so-called sign-in activity of Mixin was considered a scam.

The criticism was not only about Mixin modifying the rules, but also about the impracticality of the 10-year sign-in period. In November 2019, Li Xiaolai claimed on Weibo that Mixin had 60,000 daily active users. Based on this data, if these people signed in continuously for 5 years, Mixin would have to provide 100,000 bitcoins, which would amount to around 500 million yuan at the current price.

Jerry still remembers that at the time, answering questions required pledging assets. If one answered questions daily and signed in continuously, the weight of the dividend pie would increase. However, this dividend project was discontinued after a year. Moreover, some of the questions were misleading, such as asking where the safest place to store coins was, with the correct answer being Mixin wallet.

These marketing tactics are very "Li Xiaolai"-like. A large number of Li Xiaolai's fans follow him to make regular investments in Mixin. Jerry told Golden Finance that, for the BOX fund, Li Xiaolai specifically opened a "BOX regular investment practice group" on Mixin, aiming to increase the value of assets through regular investment in blockchain assets. Li Xiaolai livestreams lectures in the group every day, covering topics such as blockchain assets, investment, growth, and life. He also joined Li Xiaolai's "Life of Regular Investment" paid group on Mixin, with an annual fee of 0.012 BTC. There are still over 7,000 fans in the group, and these people will follow Li Xiaolai to invest in Box. In the first two years, Jerry also made regular investments in BOX in this group with Li Xiaolai, and the returns doubled. However, during the same period, Bitcoin and Ethereum saw returns of 20 times and 50 times, respectively. Later, he realized that the purpose of this paid group was actually to listen to various courses offered by Li Xiaolai.

In 2019, Jerry noticed something wrong with Mixin and Li Xiaolai because Li Xiaolai did not participate in the platform's governance, and the choice of investment targets for the ETF Box was also a mistake, including many personal interests, such as XIN.

Where Did the Lost Money Come From?

According to Defillama data, Mixin's TVL is 394 million USD, ranking 8th among all public chains, surpassing Baase and Solana. Moreover, Defillama only counts the TVL of 10 protocols.

The main TVL comes from Bwatch, with a staggering 264 million USD. Jerry analyzed to Golden Finance that the money in Bwatch is all from fans and has been hovering around this amount. The amount involved in this case is approximately 200 million USD.

Bwatch is the community of BOX, an open-source regular investment fund for digital asset investment targets designed by Li Xiaolai. BOX receives investment injections in Bwatch.

According to the Bwatch official website, the current components of BOX consist of 7 targets, including BTC, ETH, EOS, DOT, MOB, XIN, UNI. Each unit of BOX contains 0.0001 BTC, 0.0001 ETH, 0.03 EOS, 0.005 DOT, 0.01 MOB, 0.0008 XIN, 0.01 UNI. Li Xiaolai has created two courses on Bwatch: Li Xiaolai's public class and Life of Regular Investment.

BOX Token is the proof of equity participation in BOX investment. It is an ERC20 Token, with the contract address: 0x045414e728067ab3da4bceafc0d992d59183463a. After BOX Token is issued, it is all transferred to Mixin Network.

The equity of BOX follows BOX Token. Only when BOX is stored in Mixin Network (Mixin Messenger or other services in the Mixin ecosystem) and not withdrawn to the Ethereum main chain, can the equity be realized.

Mixin has its own unique ecosystem. According to the Mixin official website, there are currently 47 Dapps on Mixin Network.

These Dapps include DeFi (Pando), exchanges (4swap, Exin One, ExinSwap, Ocean One), Staking (ExinPool), wallets (MVG Bridge, Mixin Messenger, Mixin Wallet), robots (Mixin Bot, Trading Bot), social (Rum Weibo Square), tools (Ahr999 Index, Mixchat, Mixin Data), and other applications.

At 1 pm on September 25th, Feng Xiaodong responded in a live broadcast, stating that the damaged assets mainly consisted of core Bitcoin assets, and assets such as BOX and XIN did not experience serious theft. The specific details of the attack cannot be disclosed at this time. Regarding the stolen assets, the official statement indicates that currently a maximum of 50% will be compensated, and the remaining portion will be compensated in the form of bond tokens. In the future, the official will use profits for repurchase. In addition, Feng Xiaodong also mentioned that Mixin will launch a new system for user asset migration, but currently only half of the user balance can be transferred.

Seeing Feng Xiaodong's response, Jerry recalled an old story: Mixin had a wealth management section, and previously, in order to offer high interest rates, Mixin moved users' assets to Fcoin for wealth management. However, Fcoin later closed down, and the compensation received by wealth management users was also in the form of bond tokens.

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