Ankr deploys $15M to make whole users as Helio stablecoin recovers after exploit

According to a Twitter post dated Dec. 7, stablecoin protocol Helio, which issues the HAY stablecoin pegged against the U.S. dollar, said that the firm had bought back $3 million worth of bad debt in HAY thus far in the open market. The day prior, blockchain infrastructure platform Ankr stated it would allocate $15 million to buy back the bad debt resulting from its recent exploit and the resultant over-circulation of HAY. 

A series of seemingly unrelated incidents occurred on Dec. 2 when a hacker manipulated vulnerabilities in Ankr’s smart contract code and compromised private keys after a technical upgrade. As a result, the hacker minted 20 trillion Ankr Reward Bearing Staked BNB ( $753.70 ) (a BNB ( $753.70 ) c) tokens, which was pegged to the BNB ( $753.70 ) token ( BNB ( $753.70 ) ), and dumped them as the price of a BNB ( $753.70 ) c plunged to less than $2 from around $300.

However, a trader then took advantage of an alleged hard-coding of pegged prices between a BNB ( $753.70 ) c and BNB ( $753.70 ) on the Helio protocol. The trader bought 183,885 a BNB ( $753.70 ) c with only 10 BNB ( $753.70 ) and used it as collateral to borrow 16 million HAY, which was then swapped for 15.5 million Binance USD, earning a 5,209x profit from their original capital.

2/ Firstly, the team has already started our peg recovery process for $HAY, and this process is expected to be completed by Tuesday, December 6th UTC +4.

We expect HAY to be re-pegged, or at the very least, be close to the $1 mark.

— Helio Protocol ($HAY) (@Helio_Money) December 4, 2022

Subsequent to the exploit, HAY lost its peg and fell to as low as $0.20 per coin before recovering most of its losses and is now trading at $0.96 at the time of publication. Immediately after the incident, the Helio team stated that it would be repurchasing the excess HAY and sending it to a burn address. Originally, users were able to mint HAY by depositing BNB ( $753.70 ) as collateral at a ratio of 152%. The protocol had a total value locked of around $90 million before the incident.