Acala’s native stablecoin, aUSD, came close to restoring its peg to the US dollar after the Polkadot-based DeFi platform burnt over 1.2 billion aUSD tokens created over the weekend by exploiters who took advantage of a defect in one of the network’s liquidity pools.
aUSD, which was launched earlier this year, successfully maintained its soft peg to the US dollar until the breach. Following the hack, the price of aUSD dropped from about $1.03 per token to $0.009.
Following the token burning, the peg almost recovered, hitting $0.93 at the time of writing.
To offset the impact of Sunday’s exploit, Acala conducted a community vote on Monday that advocated destroying the 1.2 billion aUSD tokens. After exploiters produced the tokens and drained money from Acala’s iBTC/aUSD liquidity pool, the price of the aUSD tokens dropped by 99%.
A liquidity pool is a digital stack of bitcoin that is locked in a smart contract, resulting in liquidity for speedier transactions on decentralized exchanges (DEX) and DeFi protocols.
Over 99% of the exploited aUSD stayed on Acala, with a minor fraction traded for ACA and other tokens and moved off of the Acala parachain, according to developers in a community forum post on Monday.
As previously reported, the “damage” was assessed to be $0 to $10 million, “likely around 1.6M USD with a prospect of recovery” by the Twitter account @alice und bob.
Meanwhile, developers said in a Tuesday tweet that an ongoing trace report is underway to identify erroneously minted aUSD that have been swapped to other tokens or added to liquidity pools, as well as to identify other relevant transactions performed by the “16 wallet addresses and token outflows to other addresses, parachains, and exchanges.”