Another stablecoin crashes, but was it a bug or hack?

Some stablecoins get into trouble due to greed or unwise decisions, sometimes the publisher is just a victim of a software problem. The latter was the case for Acala Network, whose aUSD token has now lost 99% of its value.

Bug disrupts DeFi platform

The decentralized Polkadot-based Acala Network had a bug in its iBTCAUD pool, according to analysis by security researchers. The bug allowed a hacker to mint an additional 1.2 billion aUSD without enough collateral.

Immediately afterwards, the token lost its link (‘peg’ in jargon) to the dollar, dropping it to $0.0089 at the time of writing, according to data from CoinGecko. the hacker make use of an Ethereum (ETH) address funded through Binance.

The Acala team has since acknowledged the hack, and has decided to freeze the misappropriated tokens by putting the network in a state of repair.

In any case, the problem can in theory be solved by blacklisting the wrong tokens. Acala lists one address for aUSD on Polkadot, one for aUSD on Moonbeam and one for the ACA utility token on Polkadot.

No hack, not even decentralized?

However, it is striking that the developers do not mention the word ‘hacker’ anywhere on the official Twitter account. Instead, they call it a misconfiguration. One person who seems to have more information says that the Acala team has contact with the person who sent the tokens. So it doesn’t seem to be a theft, but some kind of accident.

Critics wonder whether Acala therefore still falls under decentralized finance (DeFi). If it is decentralized, then there should be a vote with the result that the network should be locked. The freezing of the tokens went very quickly.

The stablecoin was overcollateralized, but the collateral used a number of volatile cryptocurrencies, including a form of wrapped bitcoin (BTC) called iBTC. Hacks are a regular occurrence in this industry, and sometimes they have a huge impact. So it pays to keep a close eye on the crypto news.

Read Also:  MetaMask Unveils Enhanced Privacy Features

Recent Articles

Related News

Leave A Reply

Please enter your comment!
Please enter your name here