Acala’s stablecoin is heading for a LUNA-like collapse. Altcoin price is grappling with inflation after hackers produce billions of tokens.
This altcoin is the new LUNA case
Acala’s stablecoin has lost 3.65% in the last 24 hours. During the year, several stablecoins lost their peg to the dollar, causing market panic and sharp selling. The stablecoin of the Acala network, aUSD, suffers a similar fate. PeckShieldAlert shared in a tweet today that the popular Ethereum-based DeFi project has dropped to $0.71 in the last 24 hours. The aUSD price lost 3.65% during this period.
#PeckShieldAlert Stablecoin $ausd at $0.7 https://t.co/Mof5RfmUug pic.twitter.com/Hx8wlQJaBD
— PeckShieldAlert (@PeckShieldAlert) August 29, 2022
Why is the USD falling?
Recently, Acala’s stablecoin, aUSD, has been the target of hackers. Hackers exploited a vulnerability in a new liquidity pool to generate 3 billion tokens. Subsequently, newly minted tokens were exchanged for other cryptocurrencies, pushing the aUSD price into the abyss. Acala described the issue as a misconfiguration of the iBTC /aUSD liquidity pool resulting in 3 billion errors currently standing in 16 different accounts.
According to Acala Network’s tweet today, the team found that 3.02 billion aUSD was minted. Since the incident last week, many of Acala’s services have been halted. But the team behind Acala is currently investigating the case. They made some changes to their system to prevent similar attacks from happening in the future.
What is Acala USD (aUSD)?
Acala USD (aUSD) is a synthetic cryptocurrency backed by a basket of decentralized assets. The platform is used for transactions and payments without the volatility associated with other cryptocurrencies. It also aims to be a stable cryptocurrency in terms of price.
The aUSD stablecoin is minted when users deposit any of the four reserve tokens (UST (USDt), aDAI, aUSDC and sUSD) into the Acala Network. The price of aUSD is then algorithmically stabilized against the USD through on-chain mechanisms. The supply of aUSD increases as more users deposit reserve tokens in the system and decreases as users redeem their aUSD for reserve tokens.
aUSD stablecoin is an ERC20 token currently listed on several popular cryptocurrency exchanges, including Binance, Huobi Global, OKEx, and Uniswap.
