The YALA stablecoin lost its peg: hackers printed 120 million YU and crashed the price by 80%
If you suddenly thought that stablecoins had become boring and predictable, we have news for you. Yala (YU), the stablecoin backed by serious guys from Polychain, put on a show today. Due to an attack, it sharply plummeted to $0.20 before the team could panic and lift it back up to $0.917.
What happened?
Everything happened this morning. The Yala team confirmed on Twitter that they were attacked, and this was brief, but it 'affected the stability of YU'. They are now working with external security specialists to understand how this happened at all. While the team is figuring it out, they have disabled all exchange and transfer functions to prevent further harm.
The hacker's brilliant plan
Someone very smart exploited a vulnerability. According to analysts, the hacker printed 120 million YU on the Polygon blockchain, then quickly sold 7.71 million on Ethereum and Solana for 7.7 million USDC. And then, like in an old good crypto fairy tale: exchanged USDC for 1501 ETH and spread it across different wallets. And most interestingly, he still has 90 million YU on Polygon and 22.29 million on other blockchains. Beautiful.
What's the problem?
The funniest thing is that Yala, with its capitalization of $140 million, is just a tiny worm compared to the giants Tether (USDT) with $170 billion and Circle (USDC) with $73 billion. But the problem is that Yala is far from the first to lose its peg:
Tether (USDT) briefly lost it in 2023.
TerraUSD (UST) completely collapsed in 2022, and even the $9.2 billion in Bitcoin burned by its creator Do Kwon didn't help.
TrueUSD (TUSD) and even the 'unstoppable' sUSD (due to a coding error) also experienced their moments of shame.
In general, every second stablecoin has lost its 'stability' at some point. Former head of the People's Bank of China Zhou Xiaochuan grimly predicts that one in three stablecoins will collapse in the next decade.
So while the Yala team assures that 'the assets are safe', holders are on edge. It's no surprise, as a stablecoin that doesn't maintain its peg is like a taxi that doesn't take you anywhere and just stands still.
