How Acala holders almost had a heart attack…
By Lev Peschykhin 1632 16 Aug 2022
Acala is a decentralized finance network powering the aUSD ecosystem. It's a L1 smart contract platform that's scalable, Ethereum-compatible, and optimized for DeFi.
Over the last weekend, hackers minted over a billion Acala stablecoins, leading to a significant price crash. So let's dive deeper into what actually happened and how the audience reacted.
The dollar-pegged stablecoin lost up to 99% of its trading price and touched the $0.051 market bottom on Kucoin less than 2 hours after the hack. Over 1.2 billion tokens have been minted without collateral on PolkaDot’s Acala network. After the dump, $AUDT has rebound to 0.91 in less than 10 hours.
Some users and Polkadot itself claim that it was not a third-party hack but a protocol misconfiguration that resulted in erroneous mints of significant amounts of aUSD. From our side, let's wish Acala’s team luck and patience in fixing the inner protocol bug.
Other users became highly concerned about the engineering part of the Acala project, future updates, and forks in the crypto industry overall, assuming the Acala team had not done a proper audit after the last updates, which undermined their reputation and raised some disbelief among crypto enthusiasts. The most skeptical users started worrying about the upcoming Ethereum merge.
Hopefully, the Acala team has immediately reacted and paused the network functionality, such as swaps and cross-consensus messaging via urgent governance votes until further notice. Furthermore, in order to eliminate the problem, Acala's team began tracing on-chain activities on the mistakenly minted tokens. Additionally, worrying about the users, they promise to share the results with the community to facilitate the formulation of community proposal & decision making to resolve the error mint of aUSD & restore aUSD peg.
In my opinion, Acala shows its best side in terms of caring for its user's experience and reputation in general. Not surprisingly, even Acala's devoted part of the community did not stay aside but started helping the team with peer-review and verification.
Let's hope for Acala's bright future together. Their strong community support and positive attitude will not let them fall!