Another decentralized finance (DeFi) protocol altcoin project has been hacked. This time, the protocol that fell victim to the hack was Acala, which is included in the ecosystem of the popular altcoin Polkadot. Here are the details…
Acala under threat: AUSD drops to its lowest point
Polkadot’s decentralized financial network that hosts the aUSD ecosystem announced the hack on its official Twitter account. Through his post, he announced that operations were halted after “configuration issues” escalated on the network. The tweet has since left users of the platform in a panic. The post includes the following statements:
We noticed a configuration issue in the Honzon protocol affecting AUSD. We are passing an urgent vote to pause operations in Acala as we investigate and mitigate the issue. We will provide feedback when we return to normal network operations.
We have noticed a configuration issue of the Honzon protocol which affects aUSD. We are passing an urgent vote to pause operations on Acala, while we investigate and mitigate the issue. We will report back as we return to normal network operation.
— Acala (@AcalaNetwork) August 14, 2022
After gaining access to the network, hackers appear to have stolen over 1.2 billion aUSD of coins. This caused the asset to drop by 70 percent instantly. At the time of this writing, the market sentiment is bearish. Therefore, aUSD is also still feeding the losses. The pullback comes shortly after aUSD rallied to $1.03 for the first time since June 30. The asset has since dropped to $0.009. Until the issue is resolved, it’s impossible to say what’s next for the asset and its platform.
What was the role of the altcoin project in the ecosystem?
The native stablecoin of the Polkadot ecosystem, aUSD, is decentralized. It is a multi-collateralized, crypto-backed stablecoin. A USD issued in February 2022 is minted through the Collateralized Debt Positions (CDPs) system. The stablecoin is pegged to the USD value. So they make 1 aUSD equal to 1 dollar.
The hacks don’t seem to be ending anytime soon
As with Acala, many other DeFi protocols have been hacked this year. Earlier in August, Curve Finance was attacked by hackers. It was later revealed that his protocol lost about $570,000. Similarly, in March, Fortress, another DeFi lending protocol, announced that hackers had attacked the network. It was later revealed that $3 million had been stolen.
Some platforms offer hacks as an excuse for fraud. As Cryptokoin.com reported half an hour ago, the Brazilian-based BlueBenx platform claimed to have been hacked for $32 million. It has therefore suspended withdrawals. But many users claim that it is a scam, that the exchange steals user funds.
Hacks are seen as a “setback” for platforms currently under review. However, they are nothing compared to last year’s hack. More than 12 DeFi platforms were hacked in 2021. This resulted in collective losses of over $11 billion in total. After each attack, the networks’ commitment to tightening security becomes evident. However, there is no guarantee that hacks will end in the long run.
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