Balance Coin was exposed to a $915,000 vulnerability attack, and its price plummeted 99%

Balance Coin plunged 99% due to oracle attack

Balance Coin, a dollar-anchored stablecoin issued by Balance Protocol, collapsed sharply after being attacked. According to reports, the attacker manipulated the price oracle to clear collateral in multiple BTCB vaults, causing the price of the token to plummet.

According to market data, as of the writing of this article, the trading price of Balance Coin was approximately US$0.001358, a significant drop from the previous US$0.9954, a drop of more than 99%.

Core Points

· Balance Coin decoupled from the U.S. dollar after the attack, and its price fell by more than 99% from the U.S. dollar target.
·A security company attributed the attack to oracle manipulation, specifically the "abnormally low" oracle price of Binance Bitcoin (BTCB).
·The attack method resulted in the liquidation of multi-treasury collateral that should not have been liquidated, and the attacker then made a profit through carry trading.
·Another security company pointed out that the incident caused 42DAO to lose US$915,000 and claimed that 42DAO was the governance entity of the Balance Protocol.

Oracle manipulation leads to decoupling

A blockchain security company said the attack began when an attacker manipulated the oracle price of Binance Bitcoin (BTCB) to make it "abnormally low." The company claims that this artificially constructed price input allows attackers to trigger a liquidation that should not normally occur.

The security firm's analysis describes a "single transaction portfolio" approach that utilizes a mechanism similar to the so-called "lack of price protection" and "clearing delay" found in the Maker system. In this framework, an extreme oracle price can cause treasury collateral to appear under-collateralized, although this is not the case at reliable reference prices.

According to the security company, the attacker used manipulated oracle prices to clear collateral in multiple BTCB vaults, and then arbitrate the extracted assets to make profits.

Why clearing multiple vaults is important

Liquidation is usually determined by a combination of agreed mortgage rate thresholds, oracle pricing, and key time control mechanisms (such as delays or protective measures) that are designed to reduce the risk of short-term oracle anomalies directly causing economic losses.

The security company's report shows that these lines of defense are not sufficient to defend against this specific attack path. If an attacker can submit a sequence of transactions that both circumvents price protection logic and compresses the time window created by clearing delays, the damage can spread rapidly-potentially spreading to multiple vaults at once, rather than just a single position.

This amplification effect is a key reason why such DeFi incidents often cause huge damage, although the underlying vulnerability may have been around for a long time.

Reporting losses and Balance Protocol's collateral basis

Another security company said the attack caused 42DAO to lose $915,000 and identified it as a governance entity of Balance Protocol. The security company also noted that the losses involved 42 entities, reflecting the widespread impact on treasury or collateral positions in the agreement.

Balance Protocol is a DeFi project that issues Balance Coin, a stablecoin designed to anchor the U.S. dollar. According to the project's white paper, Balance Coin is mainly supported by Bitcoin Cash.

This article tried to contact 42DAO for comments, but no relevant reply had been received as of press time.

Part of a broader DeFi attack pattern

Security issues continue to revolve around DeFi's composability and its reliance on infrastructure components, especially oracle, management paths, and cross-chain mechanisms. The reported Balance Coin incident is part of a broader wave of DeFi attacks this year, with attackers targeting smart contract logic vulnerabilities, administrator control vulnerabilities, and bridging vulnerabilities.

In this case, the core issue is the interaction between oracle data and the clearing mechanism. This is crucial for traders and liquidity providers, because trust in stablecoins can quickly disintegrate when market mechanisms are disrupted-especially when contemporary currencies are anchored on agreements that may be forced to liquidate due to a oracle attack.

The broader lesson for developers and protocol operators is that protecting the clearing process requires not only setting thresholds, but also depends on the robustness of oracle inputs and the effectiveness of time control and protection mechanisms under adversarial conditions.

Points of concern for follow-up

Investors and users may be interested in whether Balance Protocol can demonstrate fixes-such as strengthening oracle protection and clearing security mechanisms, and how quickly liquidity and redemption paths, if any, can be restored after a near-complete decoupling. More technical details about the attack's modus operandi, as well as any governance or security disclosures of the 42DAO, are crucial to assessing whether a similar orator-driven liquidation failure is likely to happen again.