Stablecoin Acala Dollar (aUSD) lost its parity with the U.S. dollar following a breach over the weekend, but its price has since begun to bounce back.
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Fast facts
- Cryptocurrency analyst @Alice und Bob tweeted that the depeg was caused by US$1.2 billion of aUSD mistakenly minted in its iBTC/aUSD liquidity pool and caused a serious imbalance in the fund pool. Also, the analyst said some of the wrongly minted stablecoins have been moved out of the Acala’s chain and caused an estimated loss of US$1.6 million.
- The crypto analyst @0xTaysama – IYKYK said that the mistaken minting was due to an exploit.
- The imbalance of a stablecoin’s fund pool can attract arbitrage behavior and could lead to the capital pool being illiquid.
- The Acala Network, which supports blockchains of Polkadot and Kusama, said the error has been corrected and now it is tracking the wallets that received wrongly minted aUSD, according to a Twitter thread by its verified official account.
- The price of aUSD bounced back and traded at US$0.90 as of 12 p.m. Hong Kong time, after it slumped to US$0.57 on Sunday, according to CoinMarketCap.
- Acala said that more than 99% of the wrongly minted aUSD remains on Acala’s blockchain but has not disclosed the amount of loss.
- Acala Network said they have banned trading related to the miscast aUSD until the community decides on a solution to the problem.
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