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Meme tokens Shiba Inu (SHIB) and Dogecoin (DOGE) are up over 15% in the past 24 hours as risky behavior returned to crypto markets.
The rally came as Ether (ETH) broke through $2,000 on Sunday night ahead of the network’s expected September merge event. Bitcoin (BTC) surged above $25,000 for the first time since June.
SHIB was up as much as 30% while DOGE was up 15% before reversing in the European morning hours as investors took profits. DOGE entered the top ten cryptocurrencies by market cap with an overall valuation of just over $10 billion, ahead of Polkadot’s DOT token.
Price charts show that SHIB saw resistance at the $0.00001744 level where there had previously been price reversals. The selling pressure could see prices drop to Saturday’s $0.00001277 level where tokens were previously resisting.
The gains could be attributed to irrational exuberance, as at the time of writing, no significant catalyst was fueling a rally in the two brands. Data shows that futures tracking the two currencies saw over $25 million in liquidations, suggesting some of the rally was led by futures bets rather than spot bets.
Polkadot-based decentralized finance (DeFi) platform Acala’s native stablecoin, aUSD, depegged on Sunday, plummeting 99% after hackers exploited a bug in a newly deployed liquidity pool to mint 1.28 billion tokens.
on Sunday. A liquidity pool is a digital pile of cryptocurrency locked in a smart contract, which results in creating liquidity for faster transactions on decentralized exchanges (DEX) and DeFi protocols.
After noticing the exploit, the Acala team disabled the transfer functionality of the “erroneously minted aUSD” remaining on the Acala parachain. Parachains refer to custom, project-specific blockchains that are integrated within the Polkadot and Kusama networks and can be customized for any number of use cases.
A wallet believed to belong to the attacker still contains approximately 1.27 billion aUSD. Acala has asked white-hat hackers to return the stolen funds to Polkadot or Moonbeam addresses.
On-chain sleuths have pointed out that the attacker who minted 1.28 billion aUSD was not the only person to take advantage of the bug – several other users allegedly stole thousands of dollars worth of DOT from the liquidity pool.
The Twitter account @alice_und_bob estimated that the “damage” was $0 to $10 million, “likely around 1.6M USD with chance of recovery.”
The price of aUSD plunged from roughly $1.03 per token to $0.009.
Acala developers said Sunday night that would continue to trace the on-chain activity to resolve the error mint of aUSD and try to restore aUSD peg.
Later on Monday, Acala community members created a proposal that would result in the return of all erroneously minted aUSD to the protocol and the tokens later being burnt.
