Layer-1 blockchain network Saga has temporarily halted activity on one of its Ethereum-compatible chainlets following a significant security breach that resulted in a multi-million-dollar loss and the destabilization of its US dollar-pegged stablecoin.
Saga confirmed it paused its SagaEVM chainlet after detecting an exploit that allowed approximately $7 million in unauthorized funds to be bridged out and converted into Ether. The chain was stopped at a specific block height to prevent further damage while investigations continue.
Saga team announced in an X post on Wednesday;
According to the protocol, the incident involved a coordinated series of smart contract deployments, cross-chain transactions, and liquidity withdrawals. Saga emphasized that there was no validator failure, consensus issue, or private key leakage, and that the wider network remains operational and structurally secure.
The exploit caused Saga’s US dollar-pegged stablecoin to lose its peg, falling to $0.75 before stabilizing. Other ecosystem stablecoins were also impacted. At the same time, Saga’s total value locked dropped by nearly 55%, falling from over $37 million to around $16 million within 24 hours.
Saga has identified the attacker’s wallet and is working with exchanges and bridge operators to blacklist the address. While an official post-mortem is pending, security researchers suggest the exploit may have involved unauthorized or infinite token minting through cross-chain mechanisms. The chainlet will remain paused until safeguards are fully implemented.
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