The Polkadot-based decentralized finance (DeFi) network Acala saw its aUSD stablecoin collapse by 99% after cybercriminals leveraged a weakness in its liquidity pool, adding another stablecoin to a list of not-so-stable ones.
According to CoinGecko data, the stablecoin broke its USD anchor and fell as low as $0.009 in the wee hours of Monday morning.
Various price-tracking websites provide conflicting information about the collapse of the aUSD price. While CoinGecko reports that the stablecoin is still trading at $0.009, CoinMarketCap documented a low of $0.58 and reports that the aUSD has since climbed back to $0.93 but has not yet regained its dollar peg.
Response of Acala
Acala Network revealed in a tweet that hackers were able to create 1.28 billion aUSD owing to a “misconfiguration” of its recently opened iBTC/aUSD liquidity pool; the unexpected rush of coins led the stablecoin rapidly de-pegg in a matter of minutes.
We have identified the issue as a misconfiguration of the iBTC/aUSD liquidity pool (which went live earlier today) that resulted in error mints of a significant amount of aUSD
1/— Acala (@AcalaNetwork) August 14, 2022
“We have identified the issue as a misconfiguration of the iBTC/aUSD liquidity pool (which went live earlier today) that resulted in error mints of a significant amount of aUSD”
Following a critical governance decision, Acala halted network trades. The company urged individuals who “erroneously generated aUSD or exchanged token from such aUSD who are not on Acala” to return it to the posted addresses before they began on-chain tracing.
If you are a whitehat/recipient of errorneously minted aUSD or swapped token from these aUSD that are not on Acala, please transfer them to addresses below👇
On Polkadot: 13YMK2eYoAvStnzReuxBjMrAvPXmmdsURwZvc62PrdXimbNy
On Moonbeam: 0x7369626cd0070000000000000000000000000000
5/— Acala (@AcalaNetwork) August 14, 2022
The flaw has since been remedied, according to Acala:
“The misconfiguration has since been rectified and wallet addresses that received the errorneously minted aUSD have been identified.”
A synthetic inverse Bitcoin token called iBTC is usable on DeFi systems and may be traded for aUSD on Acala.
According to CoinMarketCap, ACA, the native token of Acala, is presently trading at $0.27, down more than 6% compared to yesterday.
Persistent StableCoin Problems
The aUSD from Acala is the latest stablecoin to significantly depeg.
In May, Terra’s algorithmic stablecoin UST collapsed, wiping out billions of dollars in value in a matter of days and attracting global regulatory attention. Instead of being an algorithmic stablecoin like UST, Acala’s aUSD is said to be multi-collateralized & supported by assets like DOT, KSM, ACA, KAR, BTC, and ETH.
Other stablecoins, such as hybrid algorithmic stablecoin DEI, which now trades for less than 20 cents, slid from their dollar peg amid Terra’s UST’s collapse in May. Tether, the biggest stablecoin in the world, wasn’t immune either; it fell as low as $0.95 before rising again.
