Another Stablecoin breaks away from the USD exchange rate and loses 98% of its value

On August 14, the Polkadot-based stablecoin alpaca usd (AUSD) dropped below one US dollar in value, only to rebound to the $0.95 region a few hours later. According to reports, the Acala protocol was compromised and an attacker managed to hit 1.2 billion AUSD.

Polkadot’s AUSD Stablecoin slips well below $1 parity.

In addition to USDT, USDC, DAI, and a few others, a number of stablecoins have had a terrible year in terms of holding their value in US dollars. The fall of terra usd (UST), now known as USTC, caused the entire terra ecosystem to implode and over $40 billion evaporated from the cryptoeconomy. As a result of this event, stable currencies like Waves’ neutrino usd (USDN), Abracadabra’s magic internet money (MIM) and Tron’s USDD fell below the dollar.

JUST IN: Hackers printed 1.2 billion $AUSD on the Acala Network through an exploit.

– Watcher.Guru (@WatcherGuru) August 14, 2022

While Terra’s USTC never regained the $1 peg. On August 14, 2022, USDN, MIM and USDD will be traded for $0.99 per coin. However, on the same day, the stablecoin based on Polkadot alpaca USD (AUSD) lost its peg. Data from coinmarketcap.com shows that an all-time low of about $0.006383 per unit was recorded on Sunday. At the time of writing, the price of AUSD had bounced around the $0.95 range, but then quickly slipped to $0.01165 in no time.

Polkadot’s Acala network tweeted about the problem just before the massive fluctuations in AUSD’s value. “We’ve noticed a configuration issue with the Honzon protocol that is affecting the AUSD “, said the official page of the Acala network on Twitter. “We are voting an urgent vote to pause operations on Acala while we investigate and mitigate the problem. We will report back when we return to normal network operations “, the team added.

ACALA protocol is currently under compromised. Apparently there was a bug in the iBTC/AUSD pool and attacker wallet now holds over a billion $AUSD. We are monitoring (AUSD is not listed on Binance) https://t.co/jRHmqLYeI8

– CZ 🔶 Binance (@cz_binance) August 14, 2022

Binance CEO Changpeng Zhao (CZ) also shared his reaction to the AUSD situation. CZ wrote:

The ACALA protocol is currently compromised. Apparently there was a bug in the iBTC/AUSD pool and [the] The attacker’s wallet now contains over a billion AUSD. We are monitoring the situation. (AUSD is not listed on Binance).

The Acala protocol states that a ‘configuration error’ resulted in a ‘significant amount of AUSD being mistyped’.

A flurry of other reports say that a hacker managed to mint 1.2 billion Australian dollars, which ultimately caused the stablecoin de-pegging incident. Hours later, Acala confirmed that an error resulted in large amounts of AUSD being minted. “We have identified the issue as a misconfiguration of the iBTC/AUSD liquidity pool (which went live earlier in the day) that resulted in a large amount of AUSD being mistakenly minted“, the team said. stated Sunday.

Acala indicates that the ” bad configuration has since been rectified“and that the team has been able to identify the wallets that received the mistakenly minted AUSD tokens. Acala released this information at 7:59 a.m. EST and said an investigation into the chain was underway.

Pending Acala community collective governance decision on resolution of the error minting, these errorneously minted aUSD remaining on Acala parachain along with these swapped Acala parachain native tokens have been transfer disabled.
4/

– Acala (@AcalaNetwork) August 14, 2022

“Pending the decision of the collective governance of the community of Acala on the following issues [the] resolution of the typo, those mistakenly minted aUSDs remaining on Acala parachain as well as those traded Acala parachain native tokens have been deactivated by transfer“, the team said. Despite this news, the AUSD remains at $0.01159 per coin as of 4 p.m. EST, at least according to coinmarketcap.com data.