Acala Hacker Mints $1.2 Billion aUSD Out Of Thin Air

The Acala hack saw over a billion aUSD stablecoins minted from thin air.
Some other functions have also been halted till further notice.
The Polkadot-based stablecoin alpaca USD (AUSD)recently lost its peg.

Acala, the decentralized finance (DeFi) center for Polkadot, was significantly attacked on Sunday against its brand-new liquidity pool. The hacker was able to create more than 1.2 billion aUSD, the project’s stablecoin, thanks to the flaw.

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The Acala team informed users on Twitter shortly after the attack that the vulnerability was the result of a “misconfiguration of the iBTC/aUSD liquidity pool.” The project claims that the incorrect setup has now been fixed.

Other functions like swaps, xcm (cross-chain communications on Polkadot), and the Oracle pallet pricing feeds were also disabled until “further notice.” Decentralization advocates have expressed outrage despite the fact that the decision to put the network in maintenance mode and freeze the hacker’s wallet may have been made to safeguard users and the network from further harm.

The aUSD stablecoin is issued by Acala, cross-chain decentralized finance (DeFi) hub based on the Polkadot (DOT) network. Acala describes aUSD, a stablecoin backed by cryptocurrency, as being censorship-resistant. Wrapped Bitcoin (BTC) is known as iBTC, and it may be utilized with DeFi protocols.

While Terra’s USDC never achieved the $1 peg, USDN, MIM and USDD are all swapping for $0.99 per coin as of August 14, 2022. However, on the same day, the Polkadot-based stablecoin alpaca USD (AUSD) lost its peg. Data from Coinmarketcap.com shows that an all-time low of around $0.006383 per unit was recorded on Sunday. At the time of writing, the AUSD price was back in the $0.95 range, but then quickly dropped to $0.01165 in no time.

Godfrey Mwirigi

Godfrey Mwirigi is an enthusiastic crypto writer with an interest in Bitcoin, blockchain, and technical analysis. With a focus on daily market analysis, his research helps traders and investors alike. His particular interest in digital wallets and blockchain aids his audience in their day-to-day endeavors.