Algorithmic stablecoin Balance Coin (BLC) completely lost its dollar peg, collapsing 99.8% to $0.0013. The crash was caused by a seconds-long oracle failure that opened the door to a targeted attack on the 42DAO protocol. The hacker exploited a vulnerability in two vulnerable smart contracts, draining approximately $912,000 from the project in a single transaction. The BTCB oracle provided an abnormally low Bitcoin price and the contracts had no protective filters or liquidation delay. To withdraw the funds, the attacker dumped millions of newly generated BLC tokens on PancakeSwap, completely destroying available liquidity and leaving the protocol with significant bad debt, with no compensation plan for victims.
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