Acala Community Votes To Burn 2.97 Billion Mistakenly Minted aUSD Stablecoins

According to a new post by Acala Network co-founder Bette Chen, the community voted to burn $2.97 billion worth of Acala USD (aUSD) stablecoin.

Acala Community Votes To Burn 2.97 Billion Mistakenly Minted aUSD Stablecoins 3

Acala is a decentralized finance platform built on the Polkadot (DOT) ecosystem. Last week, the price of aUSD fell to $0.01 against its dollar rate after the community discovered that 3.022 billion aUSD was mistakenly minted through a misconfiguration of the iBTC/aUSD liquidity pool, which operates action on August 14.

The issue has since been fixed and wallet addresses that received the mistakenly minted aUSD were identified through on-chain tracing. Over 99% of all newly minted aUSD is still on Acala parachain. However, an estimated amount of $9.69 million was swapped from aUSD to DOT and sent to centralized exchanges.

Thirty-five accounts were also identified as having purchased more than 12.38 million aUSD which was mistakenly minted.

aUSD is over-collateralized by a variety of digital assets in the Polkadot and Kusama ecosystems, with a margin rate of 195% for every aUSD generated. However, the stablecoin’s current price of $0.84 suggests that the mistakenly minted coins are still disrupting the equilibrium of the system.

aUSD price chart. Source: CoinMarketCap

The developers have launched a bounty and a public appeal to return the malfunctioning assets to the Acala network.

“Many of the services on Acala have been disrupted. Therefore the team is trying to strike a balance between accuracy and speed. We still have a bit to go before services on Acala can be fully resumed, and as more traces on aUSD error mints are being completed, our community will have a clearer picture of formulating aUSD recovery proposals.”

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Harold

CoinCu News

Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.