After the Acala exploit, the network and tokens are frozen. This raises questions

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Over the weekend, the Acala Network's aUSD stablecoin depegged by more than 99%, which forced the Acala team to stop a hacker's wallet and raises questions about its claim to be decentralized.

On Sunday, a hacker used a bug in the iBTC/aUSD liquidity pool to create 1.2 billion aUSD without collateral. This event caused the US dollar-pegged stablecoin to drop to a cent, so the Acala team put the network into maintenance mode to freeze the wrongly made tokens.

Polkadot's Acala Suffers Exploit, AUSD Depegged 99%
Other features, like swaps, xcm (cross-chain communications on Polkadot), and oracle pallet price feeds, were also turned off until "further notice."

Even though putting the network into maintenance mode and freezing the hacker's wallet funds may have been done to protect users and the network from further harm, supporters of decentralization have spoken out against the move.

Acala is a hub for cross-chain decentralized finance (DeFi) that issues the Polkadot-based stablecoin aUSD. Acala says that censorship can't stop aUSD, which is a stable coin backed by crypto. Wrapped Bitcoin (wBTC) is a type of iBTC that can be used in DeFi protocols.

People in the community have pointed out that Acala's claims about aUSD's censorship resistance are funny since the protocol quickly froze funds. On August 14, the Twitter user Gr33nHatt3R.dot pointed out that "decentralized" finance decisions "would have to go to governance:"

"Is this really DeFi if that decision is made centrally by Acala?"

Usafmike, a member of the project's Discord channel, suggested rolling back the chain to stop minting tokens all together. However, another member, skylordafk.dot, said that this would "set a bad example."

Hackers print 1.2 billion aUSD on Acala Network through exploit
At the time this was written, the network was still in maintenance mode, which stopped all token transfers. However, the team said the bug had been fixed. The wallets that got the wrongly created aUSD have been found, and 99% of them are still on Acala. This means that the community could vote to get them back if they want to.

The Acala exploit is the second big one in a week. On August 9, Curve Finance's front end was attacked, and users were told to accept a malicious contract. The problem with Acala is different from the problem with Curve, whose pools were not hacked because users who directly interacted with its smart contracts did not have any problems.

In the past few months, aUSD is the latest stablecoin to lose its peg. TerraUSD (UST), which has since been renamed TerraUSD Classic, made headlines when it lost its peg in May. (USTC). Tether (USDT) and Dei are two other well-known depegs (DEI).