On July 22, Balance Coin, the stablecoin within the 42DAO ecosystem on BNB Chain, dropped by more than 99% — from around $0.995 to approximately $0.001. The protocol lost about $915K in a single coordinated attack.
The attacker manipulated the price oracle responsible for valuing the collateral. The system accepted an abnormally low price without any deviation checks or protective limits. As a result, the forced liquidation mechanism triggered immediately and wiped out otherwise healthy positions.
During the attack, several million new Balance Coin tokens were minted and immediately sold on a decentralized exchange for stablecoins and tokenized Bitcoin. Analysts at PeckShield and SlowMist confirmed losses of between $912K and $915K. TenArmor detected suspicious activity even before the first major security alerts were issued.
Balance Coin operated as an overcollateralized stablecoin. Users deposited tokenized Bitcoin, USDT, and Bitcoin Cash as collateral to mint dollar-pegged tokens. The protocol had undergone a CertiK audit, but the review did not identify any vulnerabilities related to the oracle configuration.
By the end of July 22, the 42DAO team had still not released an official statement. Balance Coin continues to trade at around $0.001, with daily trading volume of approximately $100K.
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