Acala’s stablecoin (aUSD) crashes after breach on its network

LAGOS (CoinChapter.com) — Acala’s stablecoin (aUSD) has lost its peg to the dollar and plummeted by more than 99% in the later 24 hours following a misconfiguration on its network.

The misconfiguration allowed hackers to gain access to Acala’s network and allegedly issued more than 1.2 billion aUSD. However, the blockchain network has since confirmed the exploit and identified it as a misconfiguration of its iBTC/aUSD liquidity pool.

Acala through its official Twitter handle disclosed on Sunday that the misconfiguration in its liquidity pool led to an error mint of a large amount of its stablecoin. Notably, this mishap caused the stablecoin to lose its peg to the U.S. dollar crashing to $0.009.

Moreover, the protocol further disclosed that several portions of the erroneously minted token have been dispersed. However, it noted that the larger percentage of the stablecoin was still in its possession.

“Based on preliminary on-chain tracing, 99%+ of the errorneously minted aUSD remain on Acala parachain with a small proportion of errorneously minted aUSD being swapped for ACA and other tokens on Acala parachain.”

Acala tweeted.

Notably, it’s not yet clear how much the hacker successfully transferred off-chain in order to realize any profits from the hack. But it is important to note it was nowhere near the $1.2 billion as earlier speculated.

‘Acala Parachain Disabled Pending  Community Governance Decision’

Meanwhile, Acala has confirmed that its team is working on recovering from the vulnerability. The blockchain network in a statement noted that the misconfiguration issued has since been rectified and wallet addresses that received the erroneously minted aUSD have been identified.

It further disclosed that transfer has been disabled for its parachain and swapped parachain native tokens. The protocol also called on recipients of erroneously minted stablecoin or swapped tokens to transfer them back.

“Next up, we will continue on-chain activity trace, and share the results with the community to facilitate formulation of community proposal and decision making to resolve the error mint of aUSD and restore aUSD peg. Thanks for your patience and support, will update as we progress.”

Acala added.

ACA Plunges 10% Following Misconfiguration

Meanwhile, Acala’s stablecoin crash seems to have had a similar effect on the value of the protocol native token as it drop by more than 10% on the day.

Data from Coingecko disclosed that the token dropped to a weekly low of $0.282807 following the mishap on the network. The token at the time of publication was down by almost 15% in the last 7 days and will continue plummeting, according to speculations.

ACA’s market cap also dropped by over 20% on the day, losing about $14 million in the last 24 hours. The token currently has a 24-hour trading volume of $26.8 billion with a circulating supply of 490 million ACA coins. It also has a total supply of 1 billion.