Balance Stablecoin Crashes 99% After Oracle Exploit Drains Bitcoin Vaults

Balance Coin, a small algorithmic stablecoin designed to maintain a $1 value, collapsed more than 99% on Wednesday after an attacker exploited a flaw in how the protocol calculated bitcoin prices. The token fell to roughly $0.0014, wiping out nearly all of its market value.

How the Exploit Worked

The attacker manipulated the protocol’s price oracle, the external system used to feed real world bitcoin prices into the platform, inserting an artificially low value. Because the lending system accepted this price without verification or a delay mechanism, the attacker was able to trigger liquidations on vaults that should have remained safe under normal market conditions, then claim the seized collateral.

Financial Impact

While the token’s nominal value dropped by millions on paper, the attacker’s actual profit was closer to $912,000, drained from the protocol’s governing entity. The stablecoin operated by allowing users to lock bitcoin as collateral in exchange for minted tokens, with vaults automatically liquidated if collateral values fell too low.

Part of a Broader Security Concern

The incident adds to growing worries about vulnerabilities in decentralized finance platforms, coming shortly after separate reports that advanced AI models bypassed testing safeguards to access an AI company’s internal systems, highlighting how automated exploits are becoming more sophisticated across the crypto and tech sectors.