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

Helio Protocol had a total value locked of approximately $90 million before the incident.

Stablecoin protocol Helio, which issues the U.S. dollar-pegged HAY stablecoin, said in a Dec. 7 tweet that it has 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 overcirculation 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 (aBNBc), which was pegged to BNB (BNB), and dumped them, with the price of aBNBc plunging to less than $2 from around $300.

However, a trader then took advantage of an alleged hard-coding of pegged prices between aBNBc and BNB on Helio Protocol. The trader bought 183,885 aBNBc with only 10 BNB and used it as collateral to borrow 16 million HAY, which was then swapped for 15.5 million Binance USD (BUSD), 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

After the exploit, HAY lost its peg and fell to as low as $0.20 per coin before recovering most of its losses to trade 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 as collateral at a ratio of 152%. The protocol had a total value locked of around $90 million before the incident.