1. Acala’s aUSD and Huobi’s HUSD suffer depeg
The Facts:
- This week, two more stablecoins, Acala’s aUSD and Huboi’s HUSD, suffered a depeg.
- Parachain Acala’s stablecoin fell 99% amidst an exploit enabling the hacker to issue 1.3b tokens.
- aUSD is a decentralized, over-collateralized, and multi-collateral, crypto-backed stablecoin minted through Collateralized Debt Positions (CDPs).
- As of writing, aUSD regained some of its losses, now trading at $0.75 after almost $3b aUSD was recovered from the hacker’s wallets and got burned.
- On Thursday, Huobi’s stablecoin HUSD also depegged and fell 15% from its $1 target value.
Why it’s important:
- With Acala recovering the exploited funds, the damage was mitigated yet raised questions about Acala’s decentralized and permissionless properties.
- After countless depegs of the last couple of weeks with the Terra collapse having the most impact, stablecoins remain risky with the newest two additions of this week.
- Moreover, the last two weeks brought even more headaches when it comes to centralized issued stablecoins as the Tornado Cash sanctions and the DeFi dependency regarding the upcoming ETH PoW fork exposed major obstacles.
- Amidst concerns about censorship resistance and more stablecoins running unstable, other projects such as Liquity’s LUSD or RAI get more attention.
- RAI is similar to Liquity’s single collateral approach, yet is not bound to a price reference such as $1 but has a floating peg that changes dynamically.
