Acala Continues to Operate After Burning 2.7B in aUSD Stablecoin

    A few weeks ago, a serious incident nearly killed Acala. However, thanks to the joint efforts of community and developers, the problem has been resolved.

    On September 26, Acala Network announced the reactivation of its operations after having recovered $2.970 billion of the $3.022 billion the team mistakenly minted in August.

    According to Acala, the community voted to keep the network operating after burning most of the minted tokens.

    Earlier on August 15, DeFi platform Acala published a report explaining how they mistakenly minted more than 3 billion of their stablecoin aUSD, instantly causing it to crash. 

    According to the incident report, 16 iBTC/aUSD LP contributors received the error mints, and some of them repeatedly added more liquidity to the pool, claiming more aUSD error mints and resulting in more aUSD being erroneously minted. It noted:

    “Some of these users repeatedly swapped more aUSD error mints as the imbalance of pools grew. They then transferred a significant amount of aUSD error mints to other XCM-connected chains and CEXs.”

    aUSD plummeted more than 99%, down to below $0.01 per coin.

    After that, the network decided to stop swaps and cross-chain communications on Polkadot and oracles. The team also guaranteed operations would be resumed safely and gradually once the incident was resolved.

    Since then, the network has gone into maintenance mode which freezes user funds to recover unsafe tokens. The community then voted to identify and burn the mis-mined tokens, which restored activity despite the fact that aUSD remained at $0.75, still below the $1 peg.

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