Balance Coin (BLC) plunged 99.75% to $0.002462 after blockchain security firms reported a suspected exploit involving 42DAO. According to latest reports, the token crashed from $0.9954 to $0.002462, erasing nearly all of its roughly $3.5 million in nominal value after trading near its $1 peg just a day earlier. The stablecoin, the native algorithmic stablecoin of Balance Protocol, is currently trading at $0.002462, down from $0.9954, according to CoinMarketCap. Its 24-hour range stretched from $0.001209 to $0.9955, with 24-hour trading volume reaching $94.94K and the volume-to-market-cap ratio above 1,097% as panic selling intensified. The collapse followed months of stable trading near the $1 mark before a single, massive sell-off erased nearly all market value.
As reported by SlowMist, the attacker manipulated the protocol's bitcoin price oracle - the external price feed it relies on - to write an abnormally low bitcoin price into the system. The lending contract then accepted that price without checking it against an accurate range and without any liquidation delay, allowing the attacker to instantly liquidate multiple vaults that should never have been eligible. According to SlowMist, "A single-transaction combo exploited the missing price protection and liquidation delay in Maker-style system, allowing an attacker to liquidate multiple BTCB vaults using an abnormally low oracle price and profit from the arbitrage." The attacker reportedly moved about 761,696 BSC-USD and more than 10.73 BTCB, worth roughly $709,071, using an extremely synchronized transaction path. As reported by TenArmor, security firms detected two suspicious transactions involving GemJoin and 42DAO on BNB Chain, with the first transaction allegedly minting about 4.5 million BLC and the second minting another 5,900 BLC. The exploit points to a liquidation mechanism that caused a pricing error, amplifying into a complete loss for the entire protocol.
According to PeckShield, the attack caused the token's depeg from its dollar target, leaving it trading at a small fraction of its intended value. The attacker's actual profit was around $915,000, drained from 42DAO, the governance entity behind Balance Protocol. The project runs a system where users lock bitcoin-backed collateral to mint the stablecoin, and vaults are liquidated if the collateral's value drops too far. The transfer sequence illustrates how quickly the exploit unfolded once the manipulated oracle price entered the protocol, with over 4.5 million BLC changing hands as forced liquidations took effect on PancakeSwap. Although its price recovered slightly from the intraday low, it remained more than 99% below the level recorded before the reported exploit. CoinMarketCap describes BLC as an algorithmic stablecoin on BNB Chain designed to maintain a stable value against the U.S. dollar, while 42DAO describes the token as part of its wider financial ecosystem.
Following the sharp price decline, holder activity showed how the market adjusted to the exploit, with total holders initially edging lower as selling pressure intensified. However, the count later climbed sharply to 18.03K on 22 July, suggesting new wallets entered after the collapse. That increase may also reflect bargain hunters seeking discounted prices rather than fresh demand. Large holders still contained 64.42% of the supply, and ownership remains highly concentrated. The rise in holders alone does not confirm a recovery, as future price stability will depend on whether new participants continue accumulating while large holders refrain from further selling. The market structure indicates confidence remains fragile as traders assess the exploit's long-term impact on Balance Coin's outlook, with the token needing sustained buying, not speculative demand, to restore market confidence and price stability.
