Balance Coin Lost 99% of Its Value
Balance Coin plunged over 99% after a suspected attack on 42DAO, causing an estimated $915,000 in losses.
Algorithmic stablecoin Balance Coin lost more than 99% of its value following a suspected attack on 42DAO. The losses were estimated at approximately $915,000.
The coin’s price fell from around $0.9954 to $0.001358. As a result, Balance Coin almost entirely lost its peg to the US dollar, which was intended to keep its price stable.
42DAO is a decentralized organization that manages the Balance Protocol ecosystem and the BLC token. In practice, it is responsible for the project’s operation and development. DAO refers to a community governed by rules recorded on a blockchain rather than by a traditional central authority.
Blockchain security company PeckShield linked the sharp decline in Balance Coin’s price to an attack on 42DAO. Another cybersecurity firm, TenArmor, detected suspicious activity involving GemJoin and 42DAO on the BNB Chain network.
The project’s team has not yet disclosed the exact cause of the incident or presented a plan for its next steps.
The Balance Coin case highlights the risks associated with algorithmic stablecoins and projects built on smart contracts. An attack or security vulnerability can cause a token to lose almost all its value within a very short period.
