An algorithmic stablecoin designed to hold a $1 peg lost 99% of its value in minutes on July 22, 2026, after an attacker manipulated the protocol's price oracle and drained roughly $912,000 from its collateral vaults. Balance Coin (BLC), the native token of the Balance Protocol governed by 42DAO on BNB Chain, cratered from roughly $1 to $0.0014 , effectively wiping out nearly all of its $3.5 million market capitalization.

Balance Coin operated a Maker-style lending system. Users locked crypto collateral , primarily Bitcoin (BTCB) , into vaults to mint BLC at a 1:1 ratio against the dollar. The protocol relied on a Median Oracle to fetch the Bitcoin price and determine whether vaults remained sufficiently collateralized.

On July 22, the attacker fed the Median Oracle a fake Bitcoin price far below the real market rate. The lending contract accepted the manipulated price without checking it against any reasonable range. No circuit breaker or liquidation delay existed. Healthy, overcollateralized vaults were flagged as insolvent and liquidated automatically.

The attacker seized the seized collateral in a single transaction and walked away with approximately $912,000. Security firms SlowMist and PeckShield identified the core failures: the absence of price validation and the lack of a liquidation delay , both considered baseline design standards in DeFi.

A stablecoin is only as stable as the collateral and the machinery that values it. Once the vaults backing BLC were drained, nothing remained to defend the peg. The token collapsed 99% almost instantly.