Acala Network, which added aUSD stablecoin on the Polkadot ecosystem, has been hacked. Due to the exploit, Acala stablecoin has lost peg seriously as hackers have issued more than $1.2b aUSD. Hacking attacks have become common in the last few months as recently Nomad Bridge was also attacked in which almost $190m was wiped from the network.
Acala aUSD, which is the de facto stablecoin of Polkadot, has been badly affected by this exploit. Losing almost all its value, it fell to $0.0119 at a time from $1. Security firm, PeckShieldAlert has also confirmed that the stablecoin has broker off in the exploit. As the Acala is pegged by USD, its price coming this down has raised serious concerns in the DeFi market and traders fear that it might crash.
Reason Behind the Unfortunate Event
The Twitter handler of Acala Network has also confirmed the hack in a tweet and uncovered that some configuration issue related to Honzon protocol is the base of the problem. Honzon protocol is one of the two key protocols being utilized by Acala Network, the other protocol is Homa. Honzon protocol has been applied to enhance the liquidity of aUSD and its configuration issue has seriously hurt the price and marketcap of the stablecoin. Hanzon protocol is inspired by the MakerDAO and sometimes it is regarded as Polkadot’s MakerDAO.
In addition, the tweet further elaborated that Acala Network arranged an immediate voting session amid this crisis situation. It has been voted to halt all operation of Acala Network including withdrawals so that the drainage maybe stopped.
In addition, the tweet conveyed the information that an investigation into the matter is currently taking place to determine the scope of the attack and the amount of property that was stolen. The word “mitigation” was also mentioned in the tweet, which gives the impression that the victim holders might not have to deal with any losses at all because the network might be able to mitigate their losses. Once the problem has been fixed, the network should hopefully tweet again, and we can anticipate that the underlying cause of the issue will also be disclosed at that time.
About Acala Network
Acala is a decentralized finance DeFi network that provides stablecoin to the Polkadot and Kusama blockchains. It was developed to host a wide range of financial applications using smart contracts, cross-chains, and state-of-the-art security protocols. Recently, it has announced its partnership with Astar network for the expansion of Polkadot decentralized finance ecosystem.
Together, Acala and Astar networks will join forces to develop multiple cross-chains and liquidity pools. Furthermore, Astar network will connect Polkadot network to layer-1 blockchains including Polkadot and Cosmos. As a result, the problem of lack of blockchain interoperability will be resolved and new DApps will be developed using Ethereum Virtual Machine (EVM).
In addition to this, it will allow developers to use other DApp ecosystems which will result in an expanded digital environment. Integration of Acala assets into other ecosystem DApps with ACA and aUSD will enhance the linkage between both the Acala and Astar Networks.