Another Stablecoin Loses Peg

Hackers minted 1.28 billion a USD tokens, making the stablecoin lose dollar peg

Another stablecoin has lost its stability. A Polkadot-based DeFi platform named Acala saw the stablecoin offered by the platform named a USD crash 99%. This was due to hackers exploiting a bug found in the liquidity pool. 

The stablecoin went as low as $0.009 during the very early hours of this Monday morning as per reports on CoinGecko but other price-tracking sites state varying price points. CoinmarketCap recorded a low price point of $0.58 with the coin later reported to have climbed back to $0.91, this is still below the peg. 

Acala explained things in a twitter thread:

The tweet stated there was a “misconfiguration” in the iBTC/aUSD liquidity pool that was just recently launched. The hackers were able to mint 1.28 billion aUSD. This sudden surge of coins caused a depeg that only took minutes.

The token in question was an iBTC coin which was a synthetic Bitcoin token. This token is meant to be used on DeFi platforms and can be traded with aUSD, this is somewhat akin to the Terra-Luna relationship but not the same.

Trades on the Acala network were paused and an urgent governance vote was underway. The team of Acala will start tracing the transactions on-chain and have encouraged the hackers to return the stolen assets to addresses that were on the tweet. The bug has also been corrected as the team stated “The misconfiguration has since been rectified and Wallet addresses that received the erroneously minted aUSD have been identified.”

Acala also tweeted wallets on Polkadot and Moonbeam that can e used to transfer the ill-gotten assets.

ACA which is the native token of Acala seems to have taken a. 6% loss over the day as well.Acala is not alone in the woes of stablecoin as many other stablecoin seems to be having this issue as well. In May the fall of Terra’s stablecoin UST proceeded to wipe out billions of dollars in a matter of days. Acala’s USD is not an algorithmic stablecoin but has been touted as a multi-collateralized one that is backed by assets including DTO,KSM, ACA,BTC,KAR, and ETH.


Leave a Reply