Acala Network Works Again, Voting Phase 1 Allows LPs Withdraw Liquidity From Pools

The Acala Network said it intends to restart operations following the August mining failure involving its stablecoin aUSD. Voting for phase 1 to allow LP to withdraw liquidity from pools is being done.

Immediately after the vote on returning Acala Network was passed on September 23. The network implemented a vote to allow LPs to withdraw liquidity from pools. This is the first phase of the network’s journey to resumption since the aUSD stablecoin crash.

Currently all votes are in favor of the proposed proposal. After closing, LPs can withdraw liquidity from block #1939200 roughly 2022-09-26 01:46 (+UTC).

In August, a misconfiguration problem with a new iBTC/aUSD liquidity pool resulted in the erroneous minting of more than 3 billion aUSD. The misconfiguration of the smart contract caused Acala liquidity providers (LPs) to get the incorrect mints and constantly offer further liquidity in order to obtain more aUSD, resulting in the stablecoin being depegged.

Following a series of critical governance votes, several Acala network operations were put on hold while the team explored the problem. Following community discussions, Acala recovered 2.97 billion aUSD mistake mints from 16 identified addresses and burnt the tokens.

After the Acala Foundation borrowed aUSD with its own cash to burn and accomplish re-collateralization, all aUSD in circulation are fully collateralized. As a result, the network may resume normal operations.

Once operational again, Acala Foundation will continue to work with various partners to retrieve and return all aUSD error mints and error mint-swapped tokens to the protocol. Going forward, Acala will further strengthen the security of the Acala network.

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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