The Acala trace report suggests that 3 billion USD were erroneously created

By: Michael Wilson

The Acala trace report suggests that 3 billion USD were erroneously created

August 17, 2022 11:08 AM

Acala is still tracking tokens that were mistakenly created as a result of a bug in a recently opened liquidity pool as the dust settles on another decentralized finance attack.

The Acala Network joined a long list of vulnerable systems that became the victim of exploits in 2022, continuing the trend of high-profile security incidents.


After its introduction on August 14th, the iBTC/aUSD liquidity pool's misconfiguration was taken advantage of, causing Acala's aUSD token, which serves as the native stablecoin for the Polkadot and Kusama blockchains, to lose 99% of its value. The token's value declined from its 1:1 USD ratio to a bottom of $0.1 due to the 1.2 billion aUSD that were produced without the required collateral, according to early estimates from Acala.


In order to freeze funds, Acala put its network into maintenance mode. Eventually, the company was able to recover a sizeable amount of the uncollateralized assets. In order to restore its USD peg to parity at $1, the Acala community sponsored and approved a referendum to identify and burn the incorrectly created tokens.



The network's honzon protocol received 1,288,561,129 aUSD that had been issued to 16 particular accounts and was sent there to be burned. The remaining 4,299,119 incorrectly created aUSD in the iBTC/aUSD reward pool was subsequently destroyed.


The stablecoin was re-pegged quickly thanks to the community's participation in the strategy selected to stop the exploit, while the cryptocurrency community debates whether the Acala Network made the right choice to essentially freeze its network.


In order to provide more details about the 16 addresses that received incorrectly minted rewards, the company's event tracing report is being updated often.



The 17 reported liquidity provider addresses issued and claimed more than 3 billion aUSD, according to the update. A total of 1.29 billion aUSD error mints were burned after the Acala community referendum, but there are still 1.6 billion aUSD on these 16 addresses in the Acala parachain.