Acala DeFi Hack: Is aUSD Worth Investing in After the Exploit?

Recently, the aUSD stablecoin that's part of the Polkadot DeFi platform known as Acala was depegged by more than 99% because of a hacker. The team behind Acala was forced to place a pause on the hacker's wallet, which caused concerns for many Acala crypto investors about how decentralized the platform actually is. The Acala DeFi hack was among the most notable hacks in the crypto industry during 2022. If you're an Acala crypto user, you’ll want to understand what the Acala DeFi attack entailed, and what it means for the Acala network over the coming months.

What Is Acala?

Acala is a Polkadot DeFi platform that offers modular financial services, and comes with a liquidity hub that's designed specifically to support Polkadot DeFi. It brings borrowing, lending and stablecoin functionality to the broader Polkadot ecosystem.

Acala is a comprehensive decentralized finance (DeFi) platform that's based on Web 3.0. Since the Acala network was the very first DeFi protocol to be launched with Polkadot parachain auctions, it's considered to be the Polkadot DeFi hub. Being Ethereum virtual machine–compatible, developers can easily port over their projects from Ethereum to the Acala network. This means it can potentially become the DeFi hub for practically all cryptocurrencies.

The Acala network uses a dual-token system, which includes a governance token known as ACA and a native decentralized stablecoin known as aUSD. The ACA token is also used to pay for any transaction fees. Along with ACA, there are a wide range of additional tokens that are allowed for transaction fee payments on the Acala network.