Acala – one of Polkadot’s early adopters – recently rolled out a yield-carrying cash pool of US dollars and a form of encapsulated bitcoin, which contained a bug that was quickly exploited by hackers that led to the minting of 1.2 billion US dollars without collateral.
This week, the protocol released a report detailing the exploitation along with a proposal to recover billions of dollars. But KuCoin argued that a lot of important information regarding CEX in the report and proposal is incorrect.
According to KuCoin’s latest statement, the total number of US dollar errors sent to the exchange is 8.03 million, instead of the 4.937 million, as indicated in the community’s proposal. He also noted that the total number of dollar errors that were traded on the exchange was erroneously mentioned as 1 million instead of 5.33 million.
KuCoin said that if the current proposal with allegedly incorrect data were implemented, it would mean that more than $4.33 million worth of tokens held by token holders would be frozen and even burned. The platform added that this could lead to “serious damage” to the Acala community as well as the price of the token.
He suggested that the Acala team reconsider their community proposal and then added,
“Given the significant difference in the amount of US dollar errors deemed necessary to recover collateral, it is suggested that the Acala community reconsider the current proposal with the Acala Foundation. In order to protect users, KuCoin stands ready to continue to provide support to the Acala community and the Acala Foundation. Through our joint efforts, We hope that the incident will be resolved soon while ensuring that no innocent user suffers any loss.”
Akala Sparks on decentralization
This exploit led to the collapse of the Acala Network’s stablecoin aUSD which quickly dropped by more than 99%. In response, the team has frozen improperly minted tokens by putting the network into maintenance mode to protect users and the network from further damage. This move later turned off other features as well, including swaps, xcm (chain communication on Polkadot), and price feeds for the Oracle platform.
But this has not been so lucky with the advocates of decentralization, of whom there are many Requested How decentralized could Acala really be if it could freeze funds quickly.
A KuCoin post identifies misinformation in the Acala community proposal that first appeared on CryptoPotato.