Acala Swap Hack

TOTAL LOST $1.6M
Medium Other

Summarize with AI

ChatGPT Perplexity Claude Grok
Affected Chain 2022 Incident surface
Recovered - No recovery reported
All-Time Rank #717 By amount stolen
Auditors 1 Prior security audit

Incident Overview

Quick Summary

A misconfigured liquidity pool on Acala Swap lead to exponential minting of the Acala Dollar. Quick actors were able to transfer $1,6 million in good value off-chain.

Details of the Exploit

The Acala Network lives on the Polkadot Network and focusses on its decentralized stablecoin aUSD. On the 14th of August an Acala community member reported the detection of unusual on-chain activity. The new iBTC/aUSD pool had just gone live on Acala swap and due to an error in the code, users triggered the minting of aUSD to their wallets when trying to claim the rewards of their liquidity pool position. $1.3 billion aUSD were minted within a short time frame.

The protocol could be paused through an urgent governance proposal. The error has since been fixed and the team is still actively tracing the erroneously minted aUSD on-chain.

Acala has established a list of recovery wallets and the biggest recipient of this error with $aUSD 1.2 billion received is cooperating with the team.

Block Data Reference

Detailed breakdown of involved addresses

https://hackmd.io/@xlc/SkN2HdDA9

Incident Report

Protocol / Project Acala Swap
Date of Incident
Attack Technique Other
Classification Stablecoin
Primary Source View Post-Mortem

Protocol Information

Protocol Type Dexs
Affected Token aUSD
Official Website acala.network/
Protocol Twitter/X @AcalaNetwork
Team Public / Doxxed
Source Code Unverified

What the Attacker Needed to Succeed

Understanding the prerequisites for this type of attack helps auditors identify protocols that are most at risk and helps developers build better defenses.

Technical Knowledge Deep understanding of other and Solidity and EVM internals
Capital Required Seed capital to cover gas and initial position setup
On-Chain Access Ability to interact with smart contracts and deploy a custom exploit contract
Protocol Analysis Identification of the exploitable vulnerability in Acala Swap's contract logic - root cause: stablecoin
Execution Speed Precise transaction ordering and timing to exploit the vulnerability within a single atomic block
Obfuscation Plan A strategy to launder and move stolen funds - typically through mixers, cross-chain bridges, or decentralized DEX swaps to resist tracing

What Auditors Should Check

Could this have been caught in audit? Likely — with a thorough Other audit checklist and test coverage
Audited by Audit Report 1 — still lost $1.6M. Prior audits don't guarantee safety, especially after post-audit code changes.

If you're auditing a protocol with similar architecture to Acala Swap, these are the critical security checks that could have prevented this incident (August 2022).

  • Verify all logic paths related to Other are guarded by proper access controls and input validation
  • Review privileged functions (owner, admin, governance) for potential abuse vectors - centralization risks should be documented and bounded with timelocks or multi-sigs

Master these auditing techniques with hands-on labs and real exploit scenarios in the Smart Contract Hacking course.

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Security Audit History

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