Balance Coin Collapses 99% Following $915,000 Exploitation

Security firm PeckShield identified the breach as linked to 42DAO, a decentralized organization within the Balance Protocol ecosystem. On-chain data indicates that attackers executed two distinct transactions to bypass protocol controls. By minting approximately 4.5 million BLC tokens from a null address, the perpetrators flooded PancakeSwap liquidity pools, rapidly exchanging the unbacked assets for Binance-pegged USDT and BTCB. A secondary transaction two hours later utilized the same method to extract additional liquidity, triggering a catastrophic depegging event.

From its intended $1 peg, the token plummeted to a record low of $0.001209. While the price saw a marginal recovery to $0.00247, the asset remains effectively worthless compared to its prior valuation. TenArmor, another security group tracking the incident, confirmed the suspicious minting activity, noting that the influx of tokens created extreme selling pressure that the protocol was unable to absorb. As of the latest reports, 42DAO has yet to release a comprehensive post-incident analysis. This collapse mirrors recent industry trends where attackers exploit technical vulnerabilities to fabricate supply, a method previously observed in exploits involving Resolv’s USR and Stake DAO, signaling persistent risks in decentralized liquidity management.