We’re back to stablecoins unraveling, feels like groundhogs day, huh? This week, one of Polkadots slot chain winners, Acala, suffered a hack resulting in $1.2B of their stablecoin, aUSD, to be minted. The market deemed that “bad.”
Polkadot is a layer 1 blockchain that tried to be a spiritual successor to Ethereum, but with some weird quirks. Polkadot has this thing called parachain slots–basically they only let a certain number of projects build on Polkadot as a validator. They decided who would be allowed to build there via an auction, and the first auction winner for a slot chain slot was Acala. Acala locked up over $1.3 billion in DOT for 96 months after raising the funds through a crowd loan campaign with over 80,000 wallets participating.
Acala is your typical do-everything DeFi project. Along with their sister project, Kurara, they offer some combination of EVM-compatible stablecoin, swaps, borrowing, lending, earning/staking, etc.
Yesterday there was a hack relating to a smart contract with their aUSD stablecoin. Hackers walked away with $1.2B of the stablecoin, the token depegged and its price absolutely collapsed. At the lowest point, aUSD went from $1 down to $0.07. Acala’s team notified users of the issues on Twitter shortly after it began, and since then Acala froze functionality and liquidations:
“Meanwhile functions including swap, xcm, honzon-related etc on Acala have been paused via urgent governance votes until further notice; the oracle pallet has also been paused so that users do not need to concern liquidations in between time.”
The $1 pegged aUSD stablecoin is currently sitting at $0.84. Acala’s ACA token is down 15% on the week.