Yala’s Bitcoin-backed stablecoin YU has did not regain its greenback peg following an “tried assault” early Sunday that despatched the token plummeting to $0.2046.
The Yala crew confirmed the incident in a publish on X, noting that it “briefly impacted YU’s peg.” The crew added that they’re working with blockchain safety agency SlowMist and different safety companions to analyze the breach.
“Replace: All funds are protected. Bitcoin deposited to Yala stays self-custodial or in vaults, with none misplaced,” the crew wrote of their newest publish on X. “We’ve recognized points and, as a precaution, paused some product options. Please await our inexperienced mild earlier than re-engaging,” they added.
To forestall additional instability, Yala has disabled its Convert and Bridge options. “All different protocol capabilities stay unaffected, and person property stay protected,” the crew mentioned in a follow-up publish.
Associated: Contained in the Hyperliquid stablecoin race: The businesses vying for USDH
Attacker reportedly mints 120 million YU
The Yala crew didn’t disclose whether or not the hack was profitable and resulted in any losses. Nonetheless, blockchain analytics agency Lookonchain claimed the attacker exploited the Yala protocol by minting 120 million YU tokens on Polygon (MATIC), then bridging and promoting 7.71 million YU for 7.7 million USDC (USDC) throughout Ethereum (ETH) and Solana (SOL).
The attacker has since transformed the USDC into 1,501 ETH and dispersed the funds throughout a number of wallets, per Lookonchain. The attacker nonetheless holds 22.29 million YU on Ethereum and Solana, with an extra 90 million YU remaining on Polygon, unbridged.
YU, backed by overcollateralized Bitcoin (BTC) reserves, is designed to keep up a $1 peg. Whereas the challenge boasts a market cap of $119 million, it has solely $340,000 in USDC liquidity in its Ethereum pool, in keeping with DEX Screener.
After dropping to as little as $0.2046, YU resurged to $0.917. Nonetheless, the stablecoin has since been underneath stress, failing to revive its peg. YU is at the moment buying and selling round $0.7869 on DEX Screener.
Cointelegraph reached out to Yala for remark, however had not obtained a response by publication.
Associated: Alabama state senator warns GENIUS Act may hurt small banks
Stablecoin market nears $300 billion
The stablecoin market is approaching a $300 billion milestone. On Thursday, CoinMarketCap reported $300 billion, whereas CoinGecko and DefiLlama listed $291 billion and $289 billion, respectively.
After surpassing a $200 billion market cap in late 2024, the stablecoin market progress has accelerated, however stablecoins are but to realize mainstream adoption, in keeping with Axelar’s head of progress, Chris Robins.
“$300 billion is an early milestone within the progress of stablecoins,” he mentioned, noting that the stablecoin progress has been primarily contributed by Tether USDt (USDT), Circle’s USDC, in addition to Ethena Labs’ yield-bearing stablecoin USDe (USDE).
Journal: Bitcoin vs stablecoins showdown looms as GENIUS Act nears
