Acala Stablecoin aUSD No Longer Stable as it Loses Peg

Acala’s stablecoin aUSD, the “decentralized stablecoin of Polkadot” has lost its stablecoin status as it has depegged from the US dollar – now trading at around $0.85 but having dropped to almost $0.50.

In a series of Tweets, Acala claimed the fall in value was due to a “configuration issue.” Meanwhile, some on Twitter are wondering if aUSD is the next LUNA/TerraUSD. The Acala Dollar is a rather small stablecoin in regards to market cap and utilization

Dr Martin Hiesboeck, Head of Blockchain and Crypto Research at Uphold – a digital asset trading marketplace, distributed the following comment on aUSD losing its peg:

“As we are going to press, news emerged that Polkadot’s stablecoin aUSD by Acala depegged in what seems to be another exploit. aUSD is currently trading at $0.53. Yet another “stablecoin” going unstable is not good. The promise of decentralized finance is slowly being eroded by cybersecurity incompetence. The logical outcome is regulated finance setting the rules.”

The stablecoin market is in dire need of explicit regulation and events such as this tend to incentivize regulators and policymakers, while diminishing the credibility of projects that fail to maintain their claims.

Meanwhile, Acala works to sort out the aUSD mess or misconfiguration.

Update: Acala Dollar now trading at less than one penny so there is some work to do here.

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