Balance token crashes 99% after exploit

• Balance's algorithmic stablecoin lost almost all its value after an exploit.
• Attackers manipulated the protocol and triggered a sharp price collapse.
• The incident adds to growing concerns over algorithmic stablecoin risks.

Balance's algorithmic stablecoin plunged more than 99% after attackers exploited the protocol and drained its liquidity, causing the token to lose its peg.

The exploit allowed the attacker to manipulate the system before selling large amounts of the stablecoin, sending its price into freefall.

The Balance team paused parts of the protocol while it investigated the attack and worked to assess the full extent of the losses.

The stablecoin remained far below its intended value after the exploit, and no share price reaction was available because Balance is not a publicly listed company.

Algorithmic stablecoins use software and financial incentives instead of traditional cash reserves to maintain their price, making them more vulnerable if confidence disappears.

The latest attack follows several high-profile failures in the algorithmic stablecoin sector, reinforcing concerns about the security and stability of these projects.