Acala Network aUSD drops 99% when a hacker issues 1 billion tokens
After hackers entered the network and issued 1.2 billion aUSD tokens, Acala Network became the latest Defi network to experience a vulnerability.
The network based on Polkadot releases aUSD as its native stablecoin. aUSD is a decentralised stablecoin backed by many other crypto assets and issued using Collateralized Debt Positions (CDPs).
Despite being overcollateralized, the dollar-pegged stablecoin quickly lost its peg following the attack, falling 99% and trading at $0.00985.
0xTaylor_ was the first to identify the assault and stated that the hacker exploited a vulnerability in the iBTC/AUSD pool. Updates indicate that the hacker connected an Ethereum account to Acala, which Binance paid.
Acala network has admitted the assault through Twitter: “We have identified a configuration problem with the Honzon protocol that affects aUSD. We are passing an emergency vote to suspend activities on Acala while we investigate and address the problem. We will provide an update once regular network functionality is restored.”
However, the network has failed to provide another update, putting numerous stablecoin holders in a precarious situation.
As the USD has become almost worthless, many individuals are alarmed. However, 0xTaylor_ has stated that the network may recover.
Since “they have placed the network in maintenance mode to hinder transfers. Similar to what they did last year with Karura, they may approve a governance motion to restore the state.
While Acala may be able to rescue its network, worries regarding the security of DeFi devices are unlikely to subside very soon.
Many DeFi platforms, including Curve Finance, Fortress, Nirvana Finance, and Beanstalk, have lost millions to vulnerabilities this year alone.
Beyond DeFi protocols, the crypto sector has been beset by many flaws, with over $200 million lost to hackers this month alone.