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Acala network suspends activities after hack

Acala network
TL;DR Breakdown
  • Acala network freeze activities as hackers hit the platform
  • The networks froze the stolen tokens
  • Traders unhappy with fake decentralization claims

Acala network native token aUSD saw a massive bearish return over the weekend after the digital asset lost its peg. After the incident, the network noted that they had to freeze the wallet suspected to have belonged to the hacker. With this, analysts and market investors alike have been giving their opinion on the decentralized claims that the network has been making.

Acala network froze the stolen tokens

According to the details of the incident, the hacker saw a loophole in the liquidity pool housing the iBTC/aUSD pairing on the platform. After breaching it, he was able to min more than one billion aUSD tokens without paying for collateral. This single act saw the dollar-pegged stablecoin lose its peg, making it crash down to a cent from a dollar. In order to help the situation, the Acala network mentioned that it had to freeze the illegally mined aUSD by enforcing much-needed maintenance on the platform.

Presently, the majority of the activities on the platform including swaps, communications with other chains, and price feeds have been suspended till further notice. Although the move that the platform took was to limit theft and help users, analysts have cried foul on the claims of the network being decentralized.

Traders unhappy with fake decentralization claims

Acala network is a decentralized platform with the native token of the platform built on the Polkadot blockchain. According to the platform, the native token is resistant to censorship and is backed by digital assets. On the other hand, iBTC is also like another version of a wrapped Bitcoin that is used across several protocols in the decentralized finance market. Traders and analysts have been disgruntled over the quickness of the platform to freeze the stolen funds despite its claims that the token cannot be censored. According to a Twitter user, despite the platform’s claims to be decentralized, it seems there is still an entity making decisions on what happens on the platform.

Another top executive of the platform advised that the platform reverse the chain to recover the minted tokens but was soon chastised by another member. The team claimed that it had found a solution to the issue but presently, the platform is still in maintenance mode. News also claims that most of the stolen tokens are still on the platform and would be recovered if a vote to do so is carried out. Asides from Acala, there have been other networks that have been hit in the last couple of weeks with Curve making a good example.

Owotunse Adebayo

Owotunse Adebayo

Adebayo loves to keep tab of exciting projects in the blockchain space. He is a seasoned writer who has written tons of articles about cryptocurrencies and blockchain.

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