Acala Has Burnt Most aUSD in the Minting Exploit

Acala Has Burnt Most aUSD in the Minting Exploit

August 17, 2022 0 By Jeanine Sanchez

Acala’s stablecoin, aUSD, is currently trading up at $0.91. This follows the successful burning of 99% of those tokens that were minted via the recent exploit. The firm has now burnt 1.288 billion of its assets that were lost to the hackers in the course of the exploit that took place on Sunday.

Community Consensus for Recovery

There was a mint mistake on the Acala’s horizon protocol. The community, thus, generally agreed and gave approval via referendum to have all the wrongfully minted aUSD assets burnt. Due to all these efforts, 1.2 billion aUSD tokens have been removed from the block to effectively mitigate the existential risk of the exploit and return aUSD to its initial peg.

The authorized burn was carried out on the 16th of August. The individual effect of the said burn is already being felt on the aUSD asset. An analysis recently put out by Coingecko revealed that the asset is gradually returning to its peg. As of the time of this report, the aUSD asset trades at $0.91 as it reveals a 99% rebound from the $0.009 level it was on Sunday after the exploit.

It was reported that 1.3 billion aUSD tokens were minted in the exploit both by the hackers and users who took advantage. Up to 99% of it has now been burnt. The remaining 1%, which amounts to about 4,229,119 tokens, is said to he been swapped with some other tokens already. 

More Assets Could Still be Recovered

Further reports have it that they have equally been into several liquidity pools, which include the new iBTC/aUSD pool.

One of the community members provided an analysis on-chain. They said up to $1.6 million in aUSD could very well still get recovered. Acala announced that it is still working to trace the addresses that hold the remaining tokens. The firm said it would burn them as soon as they were recovered.

Exploits and heists have almost been the “order of the month” this year in the midst of the market downturn. A number of crypto assets and exchanges have suffered exploits in the hands of hackers.

The security guarantee of blockchains and exchanges gets to be discussed till another exploit happens. However, one of the goals of the expected Ethereum Merge is improved security.