DeFi protocol Yala (@yalaorg) is facing the biggest test since launch. Its stablecoin, $YU, suffered an exploit that shook investor confidence overnight.
According to Wu Blockchain, a hacker managed to mint 120 million $YU out of thin air. From this massive supply, the attacker quickly sold 7.71 million $YU for 7.7 million USDC, using Ethereum and Solana via cross-chain execution.
The attack sent shockwaves across the market. $YU, once marketed as a stable store of value, instantly depegged.
Price Collapse and Sudden Recovery
Data from DEX Screener shows the peg snapped at 5:14 UTC+8. $YU fell to a shocking low of $0.2074, nearly an 80% drop.
The rebound was swift but incomplete. At press time, $YU trades around $0.923, still below parity. Liquidity is razor-thin, with just $1,450 in USDC left in the YU/USDC pool on Uniswap (Ethereum).
For a token backed by major investors like Polychain, this crash has cast long shadows.
Hacker Movements Across Chains
Blockchain tracker Lookonchain mapped the attacker’s trail. The hacker still holds:
22.29M $YU spread across Solana and Ethereum
90M $YU locked on Polygon, unbridged
Meanwhile, the stolen 7.7M USDC has already been swapped for 1,501 ETH. Those funds were then split across multiple wallets, making recovery much harder.
This sophisticated cross-chain maneuver shows the attacker came prepared.
Yala Responds to the Crisis
The Yala team moved quickly to calm fears. In an official statement
they confirmed an “attempted attack” had been detected and contained with the help of security partner .
To secure the ecosystem, Yala temporarily paused its Convert and Bridge functions. The team stressed that these measures are precautionary and part of a wider system upgrade.
Importantly, they assured users that all other functions remain unaffected. Deposited Bitcoin remains self-custodial or held in secure vaults, with no user assets lost.
“We’ve identified issues and, as a precaution, paused some product features. Please wait for our green light before re-engaging.”, Yala team.
Market Sentiment and Next Steps
The exploit highlights just how fragile new DeFi ecosystems can be, even those backed by leading venture funds. With only a fraction of liquidity remaining, traders are cautious.
The rapid rebound of $YU suggests some market confidence remains, but the token’s future stability depends on how Yala patches its vulnerabilities. Cross-chain exploits remain one of the hardest security challenges in crypto.
For now, investors wait on updates from the team. Security upgrades will need to be airtight before trust is fully restored.
The Yala exploit serves as another reminder of the high-stakes environment in DeFi. One exploit, one flaw, and a so-called “stable” coin can lose nearly 80% of its value in hours.
$YU has shown signs of recovery, but the hacker still holds a massive stash across chains. Whether Yala can contain the fallout, and restore user trust, will define its future.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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