By Nathan Ferguson
The USD stablecoin of the Acala Network depegged by more than 99% during the recent weekend and the Acala team was compelled to halt a wallet of the hacker. This has originated apprehensions regarding its assertions that it is decentralized.
Acala Closes Token Transfers and Network after a Reported Exploit
On Sunday, a vulnerability on the liquidity pool called iBTC/aUSD was leveraged by a hacker. The consequence was the minting of up to 1.2B worth in aUSD without any collateral. The respective incident led to the collapse of the stablecoin.
In response, the minted tokens were frozen by the Acala team as the network was placed by it in maintenance mode. The respective move additionally stopped the rest of the features like Polkadot-based cross-chain communications (xcm), and swaps till additional notice.
Though the step to activate the maintenance mode as well as to cease the funds in the wallet of the hacker may have a positive purpose of shielding the network as well as the consumers from being harmed any further, the advocates for decentralization did not favor this and labeled it as a bad act. Acala, a decentralized finance (DeFi) center that operates across the chains, releases the Polkadot blockchain-based stablecoin ‘aUSD’.
The token is a stablecoin backed by cryptocurrency and Acala categorizes it as censorship-resistant. While iBTC is a type of Wrapped Bitcoin, having the ability to be utilized in the DeFi-based protocols. The irony of the assertions regarding the censorship resistance has been noted by the community participants since a rapid seizure of the funds by the protocol.
A Twitter consumer going by the”Gr33nHatt3R.dot” brought to the front on 14th August that the governance should be provided with the decisions if the venue intends to be categorized as decentralized.
Team Says the Bug Is Fixed, But the Network Is Still in Maintenance Mode
He elaborated that under the central control of the Acala team, the platform is not based on DeFi. Though the network is at the moment going through its maintenance mode – blocking the entirety of the token transactions – the team assured that it has fixed the vulnerability. It has identified the wallets that obtained invalidly minted aUSD and Acala still had approximately ninety-nine percent of them, making it possible that the community may retrieve them after the approval by voting.
The exploit of Acala counts as the 2nd prominent event after the attack that targeted Curve Finance on 9th August. The exploit persuaded the consumers to provide consent to a malicious contract.