Written by: Karen, Foresight News
In the early hours of September 23, Mixin Network's cloud service provider's database was hacked, resulting in the loss of some assets on the main network, involving approximately $200 million.
Two days later, SlowMist was the first to disclose this. Subsequently, Mixin's official announcement stated that they had contacted Google and the SlowMist team to assist in the investigation. After preliminary verification, the amount of funds involved was approximately $200 million.
At the same time, Mixin Network announced the suspension of recharge and withdrawal services, stating that after discussion and consensus among all nodes, once the vulnerability is confirmed and fixed, these services will be reopened. During this period, transfers are not affected.
Cyvers Alerts detected about 1,500 transactions related to Mixin Kernel. The first detected transaction occurred at 07:47:11 Beijing time on September 23, with a value of 19,000 ETH (approximately $30 million). The addresses 0x52e8 and 0x3B5f hold $117 million worth of ETH.
Mixin founder Feng Xiaodong stated in a recent live broadcast that the damaged assets are mainly in Bitcoin core assets, and there have been no serious thefts of assets such as BOX and XIN. The specific details of the attack cannot be disclosed at this time. The official statement indicates that they will compensate for up to 50% of the losses, with the remaining portion compensated in the form of bond tokens and repurchased with profits. In addition, Mixin will launch a new system for user asset migration, but currently, only half of the user balance can be transferred.
The intricate relationship between Li Xiaolai, Feng Xiaodong, and Mixin
First, let's explain the relationship between Mixin, Mixin Network, and Mixin Messenger. Mixin is an abbreviation of Mixin Network. Mixin Messenger is the first open-source DApp on Mixin Network, allowing users to log in using their phone numbers and send digital currencies directly to friends.
According to the official Mixin website, Mixin was established in November 2017 as a free, decentralized digital asset cross-chain transfer and trading network, based on a punitive PoS to prevent full node malfeasance, and using DAG as the underlying data structure model. The Mixin mainnet, also known as "Kernel," allows developers to develop their own DApps, chains, and any applications based on Mixin Network according to business needs and requirements.
Mixin's founder is Feng Xiaodong, who is also the founder and CEO of FeeXman and a co-founder of VPlayer, a video player. Vitamio, developed by him, is a well-known multimedia development framework on the Android and iOS platforms.
According to the Dingding website, Feng Xiaodong is also the legal representative of FeeXman (Beijing) Technology Co., Ltd. The company was established on September 3, 2014, and its business scope includes technology development, promotion, transfer, and consulting services. According to Tianyancha, the website of FeeXman (Beijing) Technology Co., Ltd. is mixinbots.com.
Let's look at the shareholder information. According to the Dingding website, Feng Xiaodong's shareholding ratio is as high as 94.0%, with a subscribed capital of 94,000 RMB, while Li Xiaolai holds 5%, and Tieling holds 1.0%. The subscribed capital was on October 23, 2015.
It is worth noting that in February 2016, Luo Yonghao also invested 4,000 RMB to become a natural person shareholder, but he has already exited the shareholder ranks of FeeXman Technology Company in February of this year.
The website mixinbots.com is directly linked to Wuhuaguo Adventure (Beijing). Wuhuaguo Adventure operates the mobile game live community Shou.tv. According to Dingding, Wuhuaguo Adventure has a registered capital of 18.5 million RMB, established on March 11, 2015, with Feng Xiaodong as chairman and manager, and Li Xiaolai as a director. Wuhuaguo Adventure's shareholder is FeeXman (Hong Kong) Co., Ltd. (corporate legal person), with a shareholding ratio of 100.0%.
The IT Orange website directly links the official website of Wuhuaguo Adventure to mixin.one, which then directly points to the official websites of Minxin Network and Mixin Messenger.
Feng Xiaodong's associated companies also include Tangguo World (Beijing) Technology Co., Ltd. and Aikexi (Beijing) Technology Co., Ltd., both of which are in a deregistered status.
According to Yiben Blockchain, Feng Xiaodong has also worked as the chief architect of BigONE. BigONE is a digital currency exchange under Coin Capital (INBlockchian), and Li Xiaolai is the founder of Coin Capital. Lao Mao, a partner of Coin Capital, is also one of the behind-the-scenes promoters of Mixin.
In addition, Li Xiaolai has also posted promotional videos about Mixin Network on Weibo and was one of the earliest investors in Mixin. The DApp with the highest TVL in the Mixin ecosystem is B.watch, which was also designed by Li Xiaolai. In summary, we can see the deep and intricate relationship between Feng Xiaodong, Li Xiaolai, and Mixin.
How does Mixin operate?
Regarding Mixin's operation, Mixin uses Domain gateways to introduce assets from many public chains such as Bitcoin, Ethereum, and Monero into the Mixin network. All off-chain transactions are recorded in the publicly transparent Mixin distributed ledger and written into the blockchain when withdrawals occur.
It is worth noting that Mixin's recharge and withdrawal do not use the same address. After users recharge, the assets will be transferred to the address managed jointly by the Domain gateway and nodes. More than 2/3+1 nodes need to verify and sign before the assets can be withdrawn from this jointly managed address to the target address. Therefore, all recharge addresses are empty and cannot query the balance.
In the July monthly report last month, Mixin stated that currently, Mixin Network has 26 full nodes, with a total of 3,199 assets in the entire network.
The XIN token is the utility and governance token in the Mixin network, including node collateral, governance, and creating DApps also requires consuming a certain amount of XIN tokens. The total supply of XIN tokens is 1 million, and it was publicly sold at a price of 20 EOS/XIN from November 25, 2017, to December 25, 2017, when the price of EOS rose to around $10.
Affected by the attack news, XIN has fallen by over 8% in the past 24 hours, with the current fully diluted market value at around $1.94 billion.
What is the current development status of Mixin?
Mixin stated that as a wallet solution, it currently supports 48 public chains, including Bitcoin, Ethereum, Avalanche, Polkadot, and others, with a total network asset exceeding $1 billion. As of July 27, 2023, Mixin Network has approximately 100,000 daily active users (the exact number is not yet known).
Mixin claims to have a user base of 1 million, with the highest historical TVL on Mixin reaching $2.9 billion on November 10, 2021, and the highest daily transaction volume on August 27, 2021, reaching 4.9 million transactions. In terms of TVL, according to DefiLlama data, Mixin's current lock-up amount has dropped to around $350 million.
The DApp with the highest TVL in the Mixin ecosystem is B.watch, with a TVL of $264 million. B.watch is essentially a dollar-cost averaging DApp, and B OX holders will enjoy a 50% secondary market fee split. According to the official website, B.watch was designed by Li Xiaolai, and initially, B OX consisted of three underlying assets: BTC, EOS, and XIN, which later increased to seven assets, including BTC, ETH, EOS, DOT, MOB, XIN, and UNI.
With 26 full nodes, it is still unknown how Mixin's cloud service provider's database was attacked and assets were lost. Foresight News will continue to monitor the situation.
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