Author: Jessy, Maxwell, Climber, Jinse Finance
On September 25, Slow Mist MistTrack posted on social media that the Mixin Network cloud service provider database was attacked, involving an amount of approximately US$200 million. The news broke out and caused heated discussions in the crypto. This was mainly because the well-known KOL Li Xiaolai was one of the early investors of Mixin Network. In addition, Mixin Network is also a model of making a fortune silently, and has long been ranked in the top ten of DeFiLlama TVL rankings.
The news was later confirmed, and Mixin Kernel officials stated on X (formerly Twitter) that in the early morning of September 23, 2023, the Mixin Network cloud service provider database was hacked, resulting in the loss of some assets on the mainnet. At the same time, the team has contacted Google and the Slow Mist team to assist in the investigation. After preliminary verification, the funds involved were approximately US$200 million. Mixin Network deposit and withdrawal services have been suspended. After discussions and consensus among all nodes, once the vulnerability is confirmed and fixed, these services will be reopened.
At 1 pm on September 25, Feng Xiaodong responded in a live broadcast that the damaged assets were mainly Bitcoin core assets, and assets such as BOX and XIN were not seriously stolen. The specific attack situation cannot yet be disclosed. Regarding the stolen assets, the official said that the current maximum compensation is 50%, and the remaining part will be paid in the form of bond tokens. In the future, the official will use profits to buy back. In addition, Feng Xiaodong also said that Mixin will also launch a new system for user asset migration, but the assets that can be transferred are only half of the user's balance for the time being.
Friends’ entrepreneurship
It is understood that Mixin Network is an underlying blockchain cross-chain protocol that aims to provide users with a more convenient and secure full-currency wallet and protect the safety of users’ assets. It positions itself as a free and fast peer-to-peer trading network for digital assets.
According to the official website of Mixin Network, its ICP registration subject is Fegelman (Beijing) Technology Co., Ltd. According to Tianyancha information, the company was established in 2014. The legal person of the company is Feng Xiaodong, and the current shareholder is Feng Xiaodong (accounting for 94% of the shares) , Li Xiaolai (accounting for 5% of the shares), Tieling (accounting for 1% of the shares). Previously, Luo Yonghao also held shares in the company . Fegelman's wholly-owned subsidiary is Fig Adventure (Beijing) Technology Co., Ltd., of which Li Xiaolai is also a shareholder. The company's public information shows that it is a company dedicated to providing seamless leading video services in the mobile Internet field.
According to Lianchaguan’s interview with Li Lin, the chief scientist of the Mixin Network project, Feng Xiaodong dropped out of the computer science major at Shandong University in 2009 and later joined Google Play and was an early developer of domestic Android applications.
According to public information, Feng Xiaodong earned his first $1 million through the development of Android and SDK during his student days. In 2011, he was invited to join China's leading mobile video technology service provider, Xia Technology, as a technical partner.
According to Li Lin's interview, in December 2014, Feng Xiaodong left to start his own business and established Fig Adventure Company and made an App. In December 2014, focusing on the overseas mobile game live broadcast market, Feng Xiaodong started his own business and established Fig. Big Adventure Company has made an App focusing on the overseas mobile game live broadcast market, and received joint investment from Li Xiaolai and his friend Luo Yonghao.
Subsequently, he started entrepreneurship in the field of blockchain. The blockchain team was established in November 2017 with less than 20 people. Mixin Messenger was launched in December. The product at that time had the functions of encrypted social networking and peer-to-peer transfer. Function.
On the Mixin official website, the project team declares that its mission is to provide convenience, security and privacy for digital assets and messages, and the open source software built always puts security, privacy and decentralization first. But now the irony is that the project itself has been hacked, causing potential losses of US$200 million.
In addition, the core support team of Mixin Messenger is composed of senior engineers and business experts from well-known technology and financial industries such as Weibo, Cheetah, Kingsoft, etc. When the Vitamio SDK was released, Ku6 had authorized its use.
The team behind Mixin also includes senior crypto Capital partner Laomao.
However, in early August 2019, Mixin COO "Mint" announced her resignation as Mixin Network COO due to personal reasons. According to her Zhihu article, she had assumed the post of Mixin COO in June 2018.
"Earliest Investor" Li Xiaolai's multiple platforms
Li Xiaolai has supported the project in public many times before. This is the first project to return to the crypto platform after Li Xiaolai declared that he would no longer be a crypto project. Li Xiaolai obviously also regards Mixin as his home field.
He claims to be "one of the earliest investors" of Mixin. On Mixin Messenger, he organizes communities, gives lectures, and promotes the "blockchain ETF product" BOX he launched to the audience. In August 2019, Li Xiaolai claimed on his WeChat public account that he had sold 2.8 million copies of BOX. The earliest BOX consisted of three underlying assets: BTC, EOS and XIN. XIN was issued by Mixin Network.
On November 10, 2017, XIN started trading on BigONE, an exchange owned by Li Xiaolai, with an opening price of 917 yuan on the first day of listing. In January 2018, the price of XIN rose to 15,000 yuan, but currently, the price of XIN is only about 1,400 yuan.
At the end of 2019, Mixin Messenger launched a sign-in and receive BTC activity that was pursued by a large number of users. Sign-in will give you Bitcoin, and if you sign up for one year, you will get 0.066 BTC. According to the rules, the longer you sign in, the more BTC you get. According to official data, you can get 6.6 BTC after signing in for 10 years. According to the current currency price, the 10-year income will exceed 300,000 yuan.
Soon after, Mixin Messger increased the check-in threshold, requiring users to add KYC certification, answer questions, invite users, and even purchase some designated products. Mixin frequently changes check-in rules and continuously raises the threshold, which has aroused dissatisfaction among some users. "Mixin's so-called check-in activities are nothing but a scam."
It is not only Mixin’s rule changes that have been questioned, but the 10-year signing period has also been evaluated as unrealistic. In November 2019, Li Xiaolai said on Weibo that Mixin has 60,000 daily active users. Based on this data, if these people stay for 5 consecutive years, Mixin will have to provide 100,000 Bitcoins. Calculated at the current price, About 500 million yuan.
Jerry still remembers that answering questions at that time required pledging assets. If you answer questions every day and check in continuously, the weight of the dividend BTC will become higher and higher. However, this dividend project was stopped after one year of operation. Moreover, this Q&A also has some outrageous question settings, such as misleading users into giving wrong answers, such as "Asked where is the safest place to store coins, but the correct answer is Mixin wallet."
These marketing routines are very "Li Xiaolai" style. There are a large number of fans of Li Xiaolai who follow Li Xiaolai to make fixed investments on Mixin. Jerry told Jinse Finance that for the BOX fund, Li Xiaolai opened a "BOX fixed investment practice group" on Mixin with the goal of realizing assets through fixed investment in blockchain assets. value added. Li Xiaolai gives live lectures in the group every day. The course content involves topics such as blockchain assets, investment, growth, and life. And he also joined Li Xiaolai's "fixed investment life" paid group on Mixin, with an annual fee of 0.012 Bitcoins . There are now more than 7,000 fans in the group , and these people will follow Li Xiao to bet on Box. In the first two years, he also followed Li Xiao in this group to bet on BOX, and his income doubled. However, the growth rates of Bitcoin and Ethereum during the same period were 20 times and 50 times respectively. Later he discovered that the purpose of this paid group was actually to listen to the various courses offered by Li Xiaolai.
Jerry discovered something was wrong with Mixin and Li Xiaolai in 2019, because Li Xiaolai did not participate in the governance of the platform, and the choice of Box as an ETF investment target was also wrong, and many private goods, such as XIN, were included.
Where did the missing money come from?
According to Defillama data, Mixin’s TVL is US$394 million, 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, which alone is as high as 264 million US dollars.
Bwatch is the community of BOX. BOX is an open source fixed investment fund with digital asset investment targets, designed by Li Xiaolai. BOX receives investment injection from Bwatch . Jerry analyzed to Jinse Finance that the money in this Bwatch is all fans’ money, and it has been hovering around this amount.
According to the Bwatch official website, the current BOX components are composed of 7 objects, which are BTC, ETH, EOS, DOT, MOB, XIN, and UNI.
Among them, BTC accounts for 86.69%, which means that the value of Bitcoin in Bwatch reaches 228 million US dollars (264 million US dollars * 0.867) . According to SlowMist’s analysis, the amount involved in Mixin’s case is approximately US$200 million.
Each BOX contains 0.0001 BTC, 0.0001 ETH, 0.03 EOS, 0.005 DOT, 0.01 MOB, 0.0008 XIN, and 0.01 UNI. Li Xiaolai has opened two courses on Bwatch: Xiaolai Open Course and Fixed Investment Life (paid group, about 0.012 BTC).
BOX Token is a proof of equity for participating in BOX investment. It is an ERC20 Token and the contract address is: 0x045414e728067ab3da4bceafc0d992d59183463a. After the BOX Token is issued, all funds are transferred to Mixin Network.
The rights and interests of BOX follow the BOX Token. Only if BOX is stored in the Mixin Network (Mixin Messegner or other services in the Mixin ecosystem) and is not extracted to the Ethereum main chain, it will have rights and interests .
Mixin has its own unique ecosystem. According to Mixin’s official website, there are currently 47 Dapps on Mixin Network.
These Dapps include DeFi (Pando), exchanges (4swap, ExinOne, 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 25, Feng Xiaodong responded in a live broadcast that the damaged assets were mainly Bitcoin core assets, and assets such as BOX and XIN were not seriously stolen. The specific attack situation cannot yet be disclosed. Regarding the stolen assets, the official said that the current maximum compensation is 50%, and the remaining part will be paid in the form of bond tokens. In the future, the official will use profits to buy back. In addition, Feng Xiaodong also said that Mixin will also launch a new system for user asset migration, but the assets that can be transferred are only half of the user's balance for the time being.
Seeing Feng Xiaodong's response, Jerry remembered an old incident: Mixin had a financial management section. Previously, Mixin had moved users' assets to Fcoin for financial management in order to obtain high interest rates. But then Fcoin collapsed, and the compensation received by financial management users was also bonds.
