Balance Coin Plummets 99% After Oracle Attack Drains 42DAO

Balance Coin, an algorithmic stablecoin designed to maintain a one dollar peg, crashed by more than 99 percent on Wednesday. The token fell from its one dollar target down to just below 0.0014 dollars after an attacker manipulated the price feed behind its lending protocol and drained roughly 912,000 dollars in a single transaction.

The exploit targeted 42DAO, which is the governance entity behind Balance Protocol. This system allows users to lock bitcoin backed collateral to mint the stablecoin. Security firm SlowMist reported that the attacker forced an abnormally low price for Binance peg Bitcoin into the protocol oracle. Because the lending contract lacked price protection and liquidation delays, the attacker used the fake price to instantly seize and liquidate multiple vaults.

Security firms estimated total losses to 42DAO at around 915,000 dollars. This collapse wiped out nearly all of the token market value of 3.5 million dollars, leaving holders with a fraction of a cent. Traders should watch how decentralized finance protocols handle oracle security and price verification to avoid similar risks in the future.