Polkadot lost $1.38 million after hacker exploited security flaw fixed four months earlier

Polkadot's Treasury lost $1.38 million after an attacker exploited a vulnerability developers had fixed months before its new stablecoin launched. In a Nov. 2 incident report, Parity Technologies, a blockchain infrastructure firm focused on the Polkadot and Kusama ecosystems, revealed that the security flaw had been identified and corrected in its codebase in June but never reached the affected production systems before the Oct. 24-26 attack. The disclosure exposes a security breakdown surrounding dotUSD, Polkadot's decentralized stablecoin, which launched in October under the governance of the network's decentralized autonomous organization (DAO). Unlike stablecoins issued by private companies, dotUSD was designed to operate without a centralized issuer, with DOT holders governing decisions through the network's OpenGov system. However, the vulnerability predated the stablecoin's introduction.