$1.2B Crypto hack Cause Acala’s Stablecoin(aUSD) to go to Zero
Acala Network became the latest Defi network to suffer an exploit after hackers breached the network and issued 1.2 billion aUSD tokens. The Polkadot-based network issues aUSD as its native stablecoin. aUSD is a decentralized stablecoin collateralized with several other crypto assets and minted through Collateralized Debt Positions (CDPs).
About Acala Network and Stablecoins
So far this year we have had a pretty bad stories about cryptocurrency especially Stablecoins and a brutal bear market. First it was the Tera Luna Hack with lead to the TUSD losing it peg and dropping down to zero while taking the entire ecosystem down with it. This bring to the question of how safe is algorithm coins and what are the actual risk involve in it.
Acala is a decentralized finance network powering the aUSD ecosystem. It's a layer-1 smart contract platform that's scalable, Ethereum-compatible, and optimized for DeFi. With the Acala EVM+, Acala lets developers leverage the aUSD ecosystem while enjoying the best of Ethereum and the full power of Substrate. According to Acala Network aUSD is a decentralized, multi-collateralized stablecoin backed by cross-chain assets. Stable by design with value relative to the US Dollar, aUSD is the defacto stablecoin of Polkadot and Kusama. aUSD is powered by Acala, an application-specific blockchain customized for powering liquidity, economic activity, and stablecoin utility.
What Happened: About the Exploit
Defi platform Acala is a project on the Polkadot Network and on Sunday it native stablecoin, aUSD fall to 99% after attacker printed out or minted out 1.3bilion dollar worth of cryptocurrence out of the platform there send the zero. Although overcollateralized, the dollar-pegged stablecoin lost its peg immediately after the hack, dropping by 99% and now trading at $0.00987.
Recently we have seen these similary attacker, these attacker take multiple shapes and sizes but the most common types among them is one the case where an attacker move funds that is not his from one place or platform to his own custody or a case where an attack basically create money out of thin air that is mint out new tokens from the smart contract following the discovery of a vulnerability, this is know as “Bridge Exploit” and the algorithm stablecoin are always expose tot these attacks.
Acala developers said the bug was caused by a misconfiguration of the iBTC/aUSD liquidity pool shortly after it went live on Sunday. A liquidity pool is a digital pile of cryptocurrency locked in a smart contract, which results in creating liquidity for faster transactions on decentralized exchanges (DEX) and DeFi protocols.The bug in a newly deployed liquidity pool lead to the minting of 1.28 billion tokens by the attacker.
0xTaylor_ first noticed the attack and tweeted that the hacker exploited a bug in the iBTC/AUSD pool. Updates show that the hacker linked an Ethereum account to Acala, and the address was funded from Binance. Acala network also acknowledged the attack, tweeting, “We have noticed a configuration issue of the Honzon protocol which affects aUSD. We are passing an urgent vote to pause operations on Acala, while we investigate and mitigate the issue. We will report back as we return to normal network operation.”
Report has that the wallet use for the attack has 1.2billon token in it but which as you know doesn’t worth much but fraction in the dollar. Apparently the developers has a function to disable withdrawal from the contract though this does not much help but we look out see if they can do any thing to savour the damage but at this point the project is toast. It is also found that is person also stold some thousand of dot which actually mean nothing when compare to the huge lost. But then Tera Luna attacker still remains the highest and most crushing attacker so far.
While Acala might be able to salvage its network, concerns about DeFi platforms’ vulnerability are unlikely to come to an end soon. Several DeFi platforms such as Curve Finance, Fortress, Nirvana Finance, and Beanstalk have lost millions to exploits this year alone. Beyond DeFi protocols, the general crypto scene has been plagued by several exploits, with over $200 million lost to hacks in this month alone.
Dont understand any of the term used here learn some crypto slangs here
With the recently attack on stablecoins one would be advise to tread with caution on the use of stablecoins from these protocol. On one hand one could choose not to hold stablecoin probably hold may Bitcoin or Ethereum but that could necessary expose one to the volatility of the market so please manage your risk with care and education and always be weary of those alogrithmic stablecoins
You can know about Bitcoin here or Ethereum here.
What's Your Reaction?