Updated July 22, 4:37 UTC: The article has been updated to include additional information from Slowmist on the mining method.
Balance Coin, an algorithmic stablecoin designed to maintain a peg to the US dollar, fell more than 99% following a reported exploit.
Balance Coin, Balance Protocol’s native stablecoin, is trading at $0.001358 at the time of writing, down from $0.9954. according to at CoinMarketCap.
Blockchain security company SlowMist said The exploit originated from an attacker manipulating an “abnormally low” Binance Bitcoin (BTCB) oracle price, allowing the attacker to liquidate collateral in multiple BTCB vaults that should not have been liquidable, and then exchange the extracted assets for a profit.
“A combination of single transactions exploited the missing price protection and liquidation delay in the Maker-like system, allowing an attacker to liquidate multiple BTCB vaults using an abnormally low oracle price and profit from arbitrage,” SlowMist said.
The incident adds to a series of DeFi exploits this year, as attackers continue to target smart contract flaws, compromised administrative controls, and plug vulnerabilities to siphon funds from on-chain protocols.
Related: AI Didn’t Trigger DeFi’s ‘Hackpocalypse,’ Dragonfly Partner Says
Blockchain security company PeckShield said the exploit caused losses of $915,000 to 42DAO, the governance entity of the Balance Protocol.
Balance Protocol is a DeFi project that offers the USD-pegged Balance Coin, which is primarily backed by Bitcoin Cash, according to to his GitBook.
Cointelegraph has contacted 42DAO for comment.
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