Balance Coin, an algorithmic stablecoin designed to maintain a $1 peg, crashed over 99% after a $1 million exploit targeted its bitcoin vaults. The token's value fell from near $1 to approximately $0.0014, wiping out nearly all of its $3.5 million market cap.
The attacker made off with about $912,000 in profit by exploiting a pricing error in the protocol's oracle, which allowed them to manipulate the price of bitcoin and improperly liquidate vaults. The exploit involved the attacker feeding an artificially low bitcoin price into the system, which the lending contract accepted without verification. This enabled the attacker to liquidate several vaults and exchange the seized collateral for profit.
The incident highlights ongoing security concerns in DeFi, especially as artificial intelligence systems evolve.