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Acala Network to resume operations after burning 2.7B in aUSD stablecoin

Acala Network to resume operations after burning 2.7B in aUSD stablecoin

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Following the failure to mine its stablecoin aUSD, Acala Network announced on Monday that it has resumed operations following a referendum that allowed LPs to withdraw liquidity from pools or stake LP tokens.

In August, a miscalculation of iBTC/aUSD’s liquidity pool led to a $3.022 billion mishit, pushing its price below $0.01 of its dollar peg. Acala is a decentralized finance platform built on the Polkadot (DOT) ecosystem.

The wallet addresses that had received the minted aUSD have been identified through chain tracing, allowing the recovery of $2.97 billion in erroneous minting from 16 addresses. Another 35 accounts were identified as having acquired 12.38 million falsely minted dollars.

According to the incident report, 16 iBTC/aUSD LP contributors received the wrong money, and some of them repeatedly added more liquidity to the pool, demanding more AUSD errors and resulting in more AUSD being mistakenly minted. It stated:

“Some of these users repeatedly traded more AUSD tokens as the pools became unbalanced. They then transferred a significant amount of aUSD tokens to other XCM-connected chains and CEXs.

The cause of the incident “was a vulnerability in the DEX saving code, which is part of the incentive palette,” said the company, which also announced a security plan to strengthen the security of the Acala network.

The report revealed the full extent of the incident. In total, $3.022 billion in errors were reported, $2.97 billion was found in the addresses of 16 identified LP contributors, and $12.38 million in error reports were found in the top 35 accounts that accumulated a significant amount of AUSD errors. linked to the accounts that acquired it. The remaining $52.068 million worth of counterfeit money, counterfeit banknotes and the address associated with the transaction were identified.