Over the weekend, causing the Acala team to freeze a hacker's wallet and casting doubt on the Acala Network's claim to be decentralized.
On August 14, a hacker exploited a bug in the iBTC/aUSD liquidity pool, resulting in the creation of 1.2 billion aUSD without collateral. The USD-pegged stablecoin fell to a penny as a result of this incident, and the Acala team responded by freezing the erroneously produced tokens by putting the network into maintenance mode.
Other services such as swaps, xcm (cross-chain communications on Polkadot), and Oracle pallet pricing feeds were also suspended till further notice.
While the decision to put the network into maintenance mode and freeze assets in the hacker's wallet may have been intended to safeguard users and the network from further harm, decentralization advocates have slammed the action.
Acala is a cross-chain decentralized finance (DeFi) hub that is responsible for issuing the Polkadot (DOT) blockchain-based aUSD stablecoin. Acala thinks that aUSD, a crypto-backed stablecoin, is immune to censorship.
Members of the community have pointed out the absurdity of Acala's statements about aUSD's censorship resilience, given how quickly the protocol stopped funds. On August 14, a Twitter user pointed out that in order to have 'decentralized' finance, choices would have to go to governance.
Usafmike, a member of the project's Discord channel, proposed rolling back the chain to completely reverse the token mints, but was disputed by skylordafk.dot, another member, who argued such a move would create a negative precedent.
The network was still in maintenance mode at the time of writing, blocking any token transfers, but the team confirmed that the bug had been resolved. The wallets that received erroneously minted aUSD have been discovered, and 99% of them were still on Acala, implying that they might be reclaimed by the community if it chooses to do so.
The Acala exploit is the second major one in a week, after an assault on Curve Finance's front end on August 9 that led users to approve a malicious contract. Acala's issue differs from Curve's in that the latter's pools were not jeopardized, since users who directly dealt with its smart contracts saw no problems.
aUSD is the latest stablecoin to lose its peg in recent months, following the footsteps of Terra USD de-pegged in May, which has now been renamed Terra Classic USD (USTC). Tether (USDT) and Dei (DEI) are two additional noteworthy depegs.
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