Balance Coin crashes 99% after reported $915K exploit Blockchain security firms linked the collapse to a suspected attack on 42DAO, the decentralized organization that governs the Balance Protocol ecosystem.

Balance Coin, an algorithmic stablecoin intended to maintain a 1-to-1 peg with the US dollar, experienced a collapse of over 99% in value following a reported exploit. The coin's price dropped from roughly $0.9954 to about $0.001358, as reported by CoinMarketCap. This sharp decline coincided with a security breach linked to the decentralized autonomous organization 42DAO, which governs the Balance Protocol and its native token BLC.

Blockchain security firms PeckShield and TenArmor detailed that the depegging was triggered by an exploit valued at $915,000 on 42DAO. The attack involved two transactions on the Binance Smart Chain (BNB Chain) using GemJoin and the 42DAO contracts. The first exploit minted 4.5 million BLC tokens from a null address, which were then swapped on PancakeSwap V2 for Binance-pegged stablecoins and Binance Bitcoin tokens. A second, similar exploit occurred about two hours later, minting an additional 5,900 BLC to extract more assets.

This incident is significant because the minting of unauthorized BLC tokens undermined the stability mechanisms of the Balance Protocol, causing the coin to lose its peg and crash in value. The attacks compromised the governance structure of 42DAO, highlighting potential vulnerabilities in the protocol's smart contracts. Cointelegraph noted this is an ongoing story and pledged to update information as it becomes available, emphasizing the importance of independent verification and accurate reporting.