Key Takeaways
- The Acala neighborhood has proposed finishing up a coin burn to assist aUSD regain parity with the greenback.
- After a referendum vote, the undertaking may burn 1.3 billion aUSD by sending it to the Honzon protocol.
- The undertaking was exploited yesterday as an attacker minted the identical quantity of aUSD through a vulnerability.
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The Acala neighborhood has proposed burning tokens to assist its stablecoin get better greenback parity following this weekend’s assault.
Acala May Execute Coin Burn
Acala may perform a coin burn to revive aUSD’s worth to $1.
In a proposal printed August 15, neighborhood member Dotverse proposed a referendum to determine whether or not to burn a portion of the aUSD stablecoin’s coin provide.
If the referendum succeeds, it might “successfully burn” 1.3 billion aUSD, which was erroneously minted, by returning these funds to the Honzon protocol. It could additionally burn 4.2 million aUSD which might be nonetheless within the iBTC/aUSD reward pool in the identical method. This motion would “assist resolve the error mint, restore [the] aUSD peg, and resume Acala operations,” the proposal says.
The coin burn has gained tentative assist from the neighborhood. Nevertheless, some customers expressed the need for additional info earlier than deciding. One particular person concerned within the undertaking, Bette7, confirmed that “additional hint[s] on extra funds are underway” to assist with restoration selections.
Acala was exploited yesterday, August 14, by means of a vulnerability that allowed an attacker to mint 1.3 billion aUSD ($1.3 billion). The attacker swapped these tokens for varied cryptocurrencies, together with the undertaking’s native ACA token.
These occasions have triggered the worth of Acala’s aUSD stablecoin to drop to zero. Moreover, the Acala community is at the moment frozen.
Acala is meant to function a DeFi hub for Polkadot, with aUSD functioning because the de facto stablecoin for Polakdot and associated blockchains. As such, it’s mandatory for the undertaking to revive its stablecoin with a purpose to resume exercise.
Acala is just not the primary stablecoin to expertise a serious depegging disaster this 12 months. Terra, which noticed its TerraUSD stablecoin quickly devalued in Could, equally proposed a coin burn as a response. Nevertheless, that resolution and others failed, and the asset ultimately collapsed.
Disclosure: On the time of writing, the creator of this piece owned BTC, ETH, and different cryptocurrencies.
