Acala Network Exploit: Hacker’s Wallet Frozen, Network Placed in Maintenance Mode

Share This Post

The last couple of days have been particularly challenging for the Acala Network after the project’s stablecoin, aUSD depegged by nearly 99%. The cause of the aUSD depegged was attributed to a hack, which saw the hacker indiscriminately minting over a billion aUSD tokens.

In response to the hack, the company has now paused the hacker’s wallet. But the damage has already been done, with experts questioning the company’s claim of being decentralized.

The hack, which happened on August 14, 2022, saw the hacker exploit a bug on the iBTC/aUSD liquidity pool to mint 1.2 billion aUSD tokens without collateral. The hack, though successful, crashed the USD pegged stablecoin to a cent. The Acala Network team has responded to the security exploit by freezing the erroneously minted tokens and placing the network in maintenance mode.

As part of its move to return normalcy, the Acala team has also halted other features like swaps, oracle pallet price feeds, and xcm (a cross-chain communication on DOT). Although the company’s response, which involved freezing the funds in the hacker’s wallet and placing the network in maintenance mode, seemed like the right thing to do in such a situation, many champions of decentralization have cried foul.

The argument for decentralization and the reality on ground

Acala, a cross-chain DeFi hub powered by Polkadot blockchain, issues a stablecoin aUSD. Before the hack, the company claimed its stablecoin was censorship resistant. But with the latest hack, community members are questioning the company’s claim of its stablecoin being censorship resistant, seeing how swiftly the company froze the hacker’s wallet. Some users added that for the company to implement such action, it has to go through governance.

While a member from the Acala Network Discord channel suggested rolling back the chain, a move that will help reverse the token mints entirely, another member challenged the suggestion, adding that such a move would set a dangerous precedent.

Despite confirming that the bug has been resolved, the Acala Network is still in maintenance mode. Meanwhile, the erroneously minted tokens are still on the Acala Network, so there is a possibility that the tokens can be retrieved if the community votes to do so. 

Nitish Vaibhav
Nitish Vaibhav
Nitish Vaibhav is the Founder of the The Trading Bay. A computer science engineer turned an Entrepreneur 5 years ago. He has been in trading since 4 years in Forex and Crypto using his price action strategies. Involved in Content Creation full time for 3 years, Nitish is top rated writer on many content writing websites. He is also a YouTuber in India making videos about Crypto and Forex.

Related Posts

Best Pharma Stocks List – Top 6 Pharma Stocks To Buy Now

The pharmaceutical market is considered one of the most...

Best Crypto Exchange in India – List of Top 5 in 2022

Cryptocurrency enthusiasts in India are more passionate than ever...

What is Options Trading? How Does Options Trading Work?

Options are a leading financial derivate in the investment...

What Is Polygon MATIC? A Detailed Guide to Polygon Crypto & Network

The Polygon MATIC network has swiftly risen to prominence...

What Is Sandbox? Everything You Need To Know About The Sandbox Metaverse

Setting the stage for a new digital age, many...

Blue Chip Stocks Explained: What Are Blue Chip Stocks?

While the investing domain is generally labeled as high-risk-prone...
Would love your thoughts, please comment.x