Hack: the 3 billion dollars players return to Acala (AUSD)

Good news for Acala – Earlier this week, the Acala network was the target of an attack. This led to the undue creation of several billion dollars in stablecoins. Although the event initially caused abyss during the token, the responsiveness of the Acala teams enabled them to manage the situation. So well, that the latter have so far managed to recover nearly 3 billion dollars.

Acala hack: an error on the mint

Acala is a protocol of the Polkadot ecosystem. This is the origin of aUSD, the main stablecoin of Polkadot and Kusama. Like DAI, aUSD is a decentralized, multi-collateral stablecoin. Thus, users must deposit cryptocurrency collateral on the protocol to be able to generate aUSD.

Sunday August 14, Acala teams announced to the community that they had been the target of an attack. Thus, on the same day, Acala deployed a new liquidity pool on the iBTC/aUSD pair.

However, it turned out to have a configuration problem. A situation quickly exploited by several malicious users. These have succeeded in generate billions of aUSD tokens without having to provide the necessary collateral.

Unsurprisingly, the creation of these billions of aUSD took the price of the stablecoin into the abyss. Thus, the aUSD fell from the traditional 1 dollar to $0.01 in the space of a few hours.

Fortunately, the Acala teams were extremely responsive. At the first signs of an attack, the latter froze the network, in order to ensure that the funds were not transferred to another chain.

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Recovery of stolen funds

Once the network was frozen, Acala was able to look into the recovery of fraudulently created funds.

As a first step, the governance of Acala submitted a referendum on August 16, aimed at freeze 1.3 billion aUSD tokens created by attackers. Referendum that was 95% approved by the community.

A referendum was proposed and adopted by the governance of the protocol. At block 1,652,829, 1,292,860,248 aUSD total minted in error will be returned to the honzon protocol and will be burned. »

Message published by Acala after the passage of the referendum.

Upon investigation, Acala teams discovered that a total of 3 billion aUSD tokens had been generated from nowhere. These are 16 addresses that are at the origin of this generation.

16 iBTC/aUSD LP contributor wallet addresses were identified as having transferred aUSD minted in error when they claimed their iBTC/aUSD LP rewards through the iBTC/aUSD reward pool. »

This discovery made it possible to get your hands on an additional $1.6 billion, still present on the 16 incriminated wallets. Therefore, Acala managed to trace the 3 billion aUSD tokens.

Now the community has the possibility to submit a new referendum to freeze these funds and solve the problem of the 3 billion aUSD tokens issued.

Responsiveness, transparency and community management

In this crisis, Acala’s management is exemplary. In addition to the responsiveness of the teams following the attack, they were also exemplary in their transparency with regard to crisis management.

Thus, each discovery is unveiled and explained in a section of the Acala forum.

Moreover, where many teams would have favored internal management, Acala opted for community management. Indeed, the effective use of referendums and community governance for decision-making should be highlighted.

For its part, the price of the aUSD token recorded a significant rise. This is currently trading at around $0.9, a few cents from finding its standard with the dollar.

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