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Blockchain identity platform Fractal ID suffers data breach

Fractal ID gave notice that an attacker had gained access to an operator’s account, leading to the leak of a small percentage of users’ personal data.

Blockchain identity platform Fractal ID suffered a data breach on July 14, according to a notice published on Fractal’s website on July 17. Partners of the platform include the payment system Gnosis Pay, decentralized finance app Acala, the proof of personhood project Polygon ID, the social media platform Lukso, and other Web3 applications. 

In its statement, Fractal did not identify which partners were affected by the breach, if any. Some users on X reported receiving emails from the Gnosis Pay team alerting of the breach and warning them to “be cautious of unsolicited communications.”

Fractal stated that the breach only affected “approximately 0.5% of the Fractal ID user base.”

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Polkadot-Based DeFi Network Surges by More Than 80% Amid the Launch of a New Notification Feature

Polkadot-Based DeFi Network Surges by More Than 80% Amid the Launch of a New Notification Feature

A decentralized finance (DeFi) protocol based on the interoperable blockchain Polkadot (DOT) is skyrocketing after launching a new notification feature. According to a recent article penned by the project’s chief growth officer, the scalable smart contract platform Acala Network (ACA) is enabling push notifications for users and developers of its DeFi platform. Acala will implement […]

The post Polkadot-Based DeFi Network Surges by More Than 80% Amid the Launch of a New Notification Feature appeared first on The Daily Hodl.

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USDT Issuer Tether Announces Launch of Top Stablecoin on Polkadot (DOT) Blockchain

USDT Issuer Tether Announces Launch of Top Stablecoin on Polkadot (DOT) Blockchain

The issuer of the largest stablecoin by market cap is announcing the launch of the dollar-pegged crypto asset on Ethereum (ETH) challenger Polkadot (DOT). In a new company blog post, USDT issuer Tether says the top stablecoin is now available on the Polkadot blockchain as a means of increasing its presence in decentralized ecosystems. According […]

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Acala community votes to burn 2.97 billion of erroneously minted aUSD stablecoin

A total of 3.022 billion aUSD were previously minted via a liquidity bridge glitch.

According to a new post by Acala Network co-founder Bette Chen, the community has voted to burn 2.97 billion worth of Acala USD (aUSD) stablecoin.

Acala is a decentralized finance platform built on the Polkadot (DOT) ecosystem. The week prior, the price of aUSD fell to less than $0.01 from its dollar peg after it was discovered that 3.022 billion aUSD had been erroneously minted through a misconfiguration of the iBTC/aUSD liquidity pool, which went live on August 14. 

The misconfiguration has since been rectified, and wallet addresses that received the erroneously minted aUSD have been identified via on-chain tracing. Over 99% of all newly minted aUSD remains on the Acala parachain. However, an estimated $9.69 million worth of funds were swapped from aUSD to DOT and sent to centralized exchanges.

Thirty-five accounts were also identified as having acquired an excess of 12.38 million erroneously minted aUSD.

aUSD is over-collateralized by a variety of digital assets in the Polkadot and Kusama ecosystem, with a deposit rate of 195% per aUSD minted. Yet, the stablecoin's current price of $0.84 indicates that the erroneously minted coins are still disrupting the system's equilibrium. Developers have issued bounties and public calls for the glitched assets to be returned back to the Acala network. Chen also warned:

"Many of the services on Acala have been disrupted. Therefore the team is trying to strike a balance between accuracy and speed. We still have a bit to go before services on Acala can be fully resumed, and as more traces on aUSD error mints are being completed, our community will have a clearer picture of formulating aUSD recovery proposals."

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Network and token freeze after Acala exploit raises questions

The Acala hack saw over a billion aUSD stablecoins minted from thin air, but now community members are scratching their heads wondering how a decentralized protocol would handle the clean up.

The Acala Network’s aUSD stablecoin depegged by over 99% over the weekend and forced the Acala team to pause a hacker’s wallet, raising concerns about its claim of being decentralized.

On Aug. 14, a hacker took advantage of a bug on the iBTC/aUSD liquidity pool which resulted in 1.2 billion aUSD being minted without collateral. This event crashed the USD-pegged stablecoin to a cent, and in response, the Acala team froze the erroneously minted tokens by placing the network in maintenance mode.

The move also halted other features such as swaps, xcm (cross-chain communications on Polkadot), and the oracle pallet price feeds until “further notice”

While the move to put the network in maintenance mode and freeze funds in the hacker’s wallet may have been meant to protect users and the network from any further harm, proponents of decentralization have cried foul.

Acala is a cross-chain decentralized finance (DeFi) hub that issues the aUSD stablecoin based on the Polkadot (DOT) blockchain. aUSD is a crypto-backed stablecoin which Acala claims is censorship-resistant. iBTC is a form of wrapped Bitcoin (BTC) which can be used in DeFi protocols.

Community members have noted the irony of Acala’s claims about aUSD’s censorship-resistance since the protocol froze funds so swiftly. Twitter user Gr33nHatt3R.dot pointed out on Aug. 14 that decisions "would have to go to governance to be 'decentralized' finance."

“If Acala centrally controls that decision is this really DeFi?”

A member of the project’s Discord channel usafmike proposed rolling back the chain to reverse the token mints altogether, but was challenged by skylordafk.dot, another member who said such an action would “set a harmful precedent.”

As of the time of writing, the network was still in maintenance mode to block all token transfers, but the team confirmed that the bug had been fixed. The wallets that received erroneously minted aUSD have been identified, and 99% of them were still on Acala which leaves the possibility that they may be retrieved by the community if it votes to do so.

Related: Binance recovers the majority of funds stolen from Curve Finance

The Acala exploit is the second major one in a week as Curve Finance (CRV) experienced an attack on its front end on Aug. 9 which directed users to approve a malicious contract. Acala’s problem differs from Curve’s as the latter’s pools were not compromised as users who directly interacted with its smart contracts experienced no issues.

aUSD is the latest stablecoin to lose its peg in the past few months, starting notoriously with Terra USD (UST) in May, which has since been renamed to Terra Classic USD (USTC). Other notable depegs include Tether (USDT) and Dei (DEI).

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Four Altcoins Built on Polkadot (DOT) Explode Amid Rapid Ecosystem Developments

As cross-chain interoperability protocol Polkadot (DOT) continues to grow, several projects built upon its framework are seeing major price gains. Moonbeam (GLMR) is a smart contract platform compatible with the Ethereum Virtual Machine (EVM) that functions as a Polkadot parachain. The project goes beyond Ethereum’s base features by also offering staking, on-chain governance and cross-chain […]

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