42DAO's Balance Protocol Hit with Potential $915K Exploit
42DAO's Balance Protocol, a decentralized financial (DeFi) protocol that allows users to create stablecoins pegged to the US dollar by collateralizing Bitcoin on the BNB chain, was potentially exploited for around $915,000. According to security firm SlowMist, attackers manipulated an oracle price of BTCB, which is a Bitcoin-pegged token on the BNB chain, and used it to liquidate multiple positions that were not supposed to be cleared.
The protocol's stablecoin, Balance Coin (BLC), lost around 99% of its value after the incident, dropping from $0.9955 to $0.001209. The price has remained in the same range as of July 24.
SlowMist attributed the loss to a lack of price deviation checks and maximum drawdown limits on the Spotter, which is responsible for reflecting market prices. They also stated that there was no minimum price protection mechanism implemented on the Dog, which is responsible for delaying liquidations after price updates.