Previous review: Mixin is a so-called decentralized asset management network that ensures asset security through private key sharding encryption. Due to the relationship between the founder and technical details, Mixin caused a lot of discussions on security and compliance when it was launched.
Mixin officially issued a statement at 10:50 am on September 25, 2023. The Mixin Network cloud service provider database was hacked in the early morning of September 23, 2023, resulting in the loss of some assets on the main network. According to preliminary investigations by Google and SlowMist, the funds involved are approximately US$200 million.
Amid cheers and expectations, BTC finally broke through 30,000 US dollars relying on the news of spot ETFs. However, if friends in the currency circle want to achieve financial freedom, in addition to following the market trend, they must also protect their own assets. Otherwise, even if BTC goes to da moon ! It is also a waste of effort. Cregis summarized the Mixin theft incident that caused everyone to be in an uproar half a month ago, hoping to allow everyone to better protect their digital assets in the next bull market!
(Mixin official X released the stolen news)
Binance CEO Changpeng Zhao immediately commented that MiXin a decentralized peer-to-peer network has a database, saying that he could not understand it and believed that not everything that claims to be decentralized is decentralized.
(CZ questioned the degree of decentralization of Mixin on X)
So, why is a so-called decentralized network successfully attacked by hackers, and how are users’ assets stolen?
In order to let everyone understand the ins and outs, Cregis Reseach has compiled three key pieces of information:
Product form of the Mixin project
First of all, Mixin is not only an asset management product. The entire project consists of Mixin Network (BTC’s nominal ledger), Mixin Message (a social DAPP, known as the benchmark for WeChat) and Xin Token (Mixin Network’s POS pledge tool, also used for transactions)
How the Mixin network works
Mixin Network has two core components: [Mixin Full Node] and [Mixin Domain].
[Mixin Domain] is the core of the mystery of the entire theft incident! [Mixin Domain] is actually a component similar to a hot wallet system, providing each Mixin customer with an independent Bitcoin recharge address, and transferring the private key through Distributed key generation (DKG for short, one of MPCs technical solutions). Sharding, and key sharding is jointly managed by [Mixin Domain] and [Mixin Full Node].
After the user recharges the Mixin DAPP address, the assets will eventually be collected and saved in a multi-signature address jointly managed by [Mixin Domain] and [Mixin Full Node], and then the amount will be mapped to the Mixin network and Mixin DAPP.
The foreshadowing of Mixin’s crisis also emerged from this:
a) The DKG sharding method is not the orthodox GG 18 MPC solution. Due to the existence of the original private key, there is objectively a risk of internal external asset theft;
b) Key shards are stored on [Mixin Domain] and [Mixin Full Node], and Mixin’s official white paper clearly states that shards are backed up. Objectively, there is a risk of internal external stealing shards for multi-signature transactions. (This is also the most likely reason why users lose BTC after cloud server data is stolen)
c) The customer assets displayed on Mixin DAPP are not real BTC, nor are they xBTC executed cross-chain through smart contracts. They are just accounting points generated by Mixin Network after receiving recharge communications, which are no different from the account balances of centralized exchanges.
(Take the red envelope sending function of Mixin message as an example to simulate the Mixin product workflow)
Ways Hackers Steal Mixin Customers’ BTC
At this point, I believe experienced friends already know how big the pit is in Mixin, and Cregis Reseach is still sorting out where Mixin customers’ BTC is most likely to go from the two dimensions of internal evil and external evil:
1. Internal evil (two directions)
If the workflow of the Mixin network is indeed consistent with what is described in the white paper, then there are two directions for internal evil:
a) The project party controls 2/3+1 number of full node servers and can initiate multi-signature transactions at any time. Mixin currently has about 35 operating nodes. According to Mixin’s core code configuration file, the number of self-operated nodes by the Mixin team is about 27. In addition, since you need to pledge about 2 million US dollars of Mixin Token to run a [Mixin full node], and the number of external nodes is far insufficient in reality, multi-signature attacks launched through the node server can be ruled out as being caused by outsiders.
Mixin network’s official configuration document
b) According to Mixin’s official white paper, in order to prevent key shards from being lost, Mixin will perform multiple backups of key shards on the official server. So even if its not possible
Control the full node server to sign transactions, and you can also use backup private key shards to initiate transactions.
Mixin official white paper describes key shard backup
2. External evil (4 directions)
Reasoning from a hacker’s perspective, the ways to penetrate Mixin Network’s defense are as follows:
a) Break through 2/3+1 number of full-node cloud servers;
b) Break through the private key shards to back up the server/database;
c) Penetrate the [Mixin Domain] server/database, master the private keys of a large number of recharge addresses, and steal uncollected hot wallet assets;
The above purely technical path seems simple, but the amount of work required to succeed is huge. In fact, hackers also have simpler (lucky) ways to use phishing emails or websites to attack Mixins core technology or operation and maintenance personnel. Once a careless victim takes the bait, hackers can use Trojans to enter the other partys host and collect cloud server passwords and other information for precise attacks.
To sum up, although there is currently no direct evidence that the theft of Mixin is self-inflicted, the logic of its technical implementation does have loopholes.
The Mixin theft incident affects more than just customers who have lost their assets. Bitcoin was born out of peoples disappointment and resistance to centralized financial institutions. Idealists hope to create an economic model that requires no trust and cannot do evil. However, after more than ten years of development, digital assets still seem to be unable to get rid of centralized management routines. . The core reason why most assets are lost is still trusting the wrong object.
Security and convenience, where will the balance of encrypted custody ultimately swing?
Through the MiXin incident, we discovered that if any person or institution chooses a hybrid co-management method to save their digital assets, it is essentially a centralized asset management method.
While enjoying functions such as convenient social login, private key recovery, account retrieval, etc., any transfer on the asset chain must be coordinated by a third party, which inevitably involves internal or external risks.
Cregis products have always adhered to the security strategy of customer self-custody. Although it will sacrifice some convenience, it can ensure that customers do not need to worry about losing their assets due to Cregis. This product feature is in line with the needs of enterprise-level fund management that are extremely concerned about security. And together.
When a Web 3.0 enterprise grows in scale, it may no longer be willing to rely on the functions provided by the asset hosting service providers server. At this time, you need the private deployment function of Cregis. Cregis can authorize the deployment of all source code from clients to algorithm libraries to financial collaboration management to customers servers. This code has been audited and has been proven to be free of security vulnerabilities for 6 years. Customers have the same security as a hardware wallet and can experience the rich features of Cregis. Moreover, if there are no requirements for software upgrades and maintenance, customers no longer need to contact Cregis and can completely protect their trade secrets.
safety
In terms of security, Cregiss privatized deployment limits all data and transaction activities to the private servers of the project organization to ensure the security and controllability of user assets and data. Such a security model can effectively block various external threats, including but not limited to hacker attacks, data theft, or instability of third-party services. Even Cregis does not have direct access to the users private key shards.
This unique security design contrasts with most solutions on the market that rely on centralized hosting or hybrid hosting.
Exclusive server resources
As digital assets and Web3.0 applications become increasingly complex and large, the optimization and management of server resources has become particularly critical. In Cregis private deployment mode, server resources can be used exclusively without sharing them with other customers or projects.
Support private customization
In the increasingly complex Web 3.0 environment, standardized solutions often cannot meet the specific needs of all organizations or projects. Cregis therefore meets not only standardized needs but also individual needs. Private deployment of Cregis supports highly customizable financial collaboration management functions and flexible customization to specific business needs.
One-on-one technical consulting services
Digital asset management and Web3 project operations involve multiple complex aspects, from transaction execution and data processing to security protection and compliance. Cregis privatized deployment not only provides powerful technical infrastructure, but also provides one-on-one technical consulting services. Whether you are facing problems in system configuration, transaction confirmation or security protection, the professional technical team can provide you with the first time Come up with solutions.
Unlimited number of wallets, addresses and currencies
Cregis private deployment allows users to add new wallets and addresses without restrictions, meaning you have the freedom to manage a variety of different types of digital assets.
