Acala Has Revealed A 3B aUSD Was Erroneously Minted

by | Aug 28, 2022 | Market, Market News, News | 0 comments

Decentralized Finance’s exploitation is randomly taking place. After a misconfiguration in a newly launched liquidity pool, Acala continues to scan tactfully minted assets. The Acala USD (aUSD) token is known as a native stablecoin for the Polkadot and Kusama blockchains. Its value decreased to 99% after exploitation in misconfiguration of the iBTC/aUSD liquidity pool. 

What Is The Issue?

According to Acala’s shared information, 1.2 billion aUSD was minted without the compulsory parallel. It causes the de-peg token’s value from its 1:1 peg with the U.S. dollar to a bottom of $0.01.

Now, Acala keeps the network under maintenance to freeze funds. It ultimately managed to compensate for a significant portion of the unparalleled tokens. Later, the Acala community decided to vote on a referendum aiming to recognize and destroy the erroneously minted tokens. Along with that, it was expected to return its dollar peg to parity at $1.

Eventually, a community governance referendum happened and also passed approximately at the block of 1652829. Within 35 minutes, a total of 1,292,860,248 erroneously minted aUSD finalized to return to the Honzon protocol. Also, it will be burned.

Acala’s Statement :

Recently, Acala tweeted that 1,288,561,129 aUSD was minted on 16 different accounts. That was returned to the Honzon protocol of the network to burn. Another 4,299,119 erroneously minted aUSD left in the iBTC/aUSD reward pool. That was also destroyed.

Meanwhile, the cryptocurrency community has concerns about whether the Acala Network took the right decision to essentially freeze its network. That time, the stablecoin was able to be re-pegged in a short time.

Interlay’s Service :

Presently, Interlay is keeping its eyes on Acala’s investigation regarding this ongoing issue. It is also to see if or in which way iBTC and the users’ funds are affected.

Interlay is a service provider that provides opportunities to the users to wrap Bitcoin (BTC) to iBTC. After that, they can use it across decentralized finance platforms. For the iBTC/aUSD pool’s consequence of the exploit, Interlay started serving its services. Alexei Zamyatin, the Interlay co-founder, said that the attack did not compromise the protocol despite having straight exposure to the impacted liquidity pools.

The Concerns :

In these ongoing investigations, the theory says that the misconfiguration in the iBTC/aUSD pool allowed an attacker to mint an erroneous amount of aUSD. This incident caused fears that the attacker would buy iBTC with the illegal aUSD tokens and convert that to BTC. That might nullify Acala’s ability to compensate for the tokens and restore its peg.

It was stated that Acala has used iBTC in the impacted pools and also other non-Interlay assets. Though, the incident has not endangered Interlay as a network in any way. All system operations have remained fully functional.

The company’s trace report is constantly updating and providing more information about the 16 addresses that received erroneously minted rewards.

Later, Acala shared that according to the update, over 3 billion aUSD was minted and claimed by the 17 moped liquidity provider addresses. As a result of the Acala community referendum, around 1.29 billion was burned. But another 1.6 billion minted aUSD are in error on these 16 addresses on the Acala para chain.

The Recent Exploits :

Notably, this year the Nomad Token Bridge drained $190 million from its bridge. The report said that hundreds of crypto exploiters and white hat individuals aimed to return the funds they got from the security exploit. Though, within some hours, $190 million was removed.

Also, recently, Solana blockchain wallets Phantom and Slope users asserted that a suspected exploit has drained their tokens randomly. Both the wallets got ruined a massive amount of toke due to this suspected exploit.

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