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Yala’s Bitcoin-backed Yu Stablecoin struggles to get the peg after being exploited

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Bitcoin supported by Yala’s Bitcoin failed to recover the dollar peg following a “attempted attack” of early week sending the token that fell to $ 0.2046.

The Yala group confirmed The incident in an X post, noted that “it briefly affected Yu’s peg.” The team added that they work with the blockchain security firm Slowmist and other security partners to investigate the violation.

“Update: All funds are safe. The Bitcoin deposited in Yala remains self-customial or in the vaults, with no lost,” the team wrote in their latest Post on X. “We have identified issues and, as cautiously, some product features paused. Please wait for our green light before re-Entress,” they added.

To prevent further instability, Yala disables the features of the convert and bridge. “All other protocol functions remain unaffected, and user assets will remain safe,” the team said in a follow-up post.

*The Yala team announced that all funds are safe. Source:* *Yala*

Attacks are reported mints 120 million yu

The Yala team will not reveal if the hack is successful and has resulted in any losses. However, the Blockchain Analytics Firm LookonChain claimed The attack exploited the Yala’s protocol by mining 120 million YU tokens in Polygon (MATIC), then the collapse and sale of 7.71 million YU for 7.7 million USDC (USDC) throughout the Ethereum (Eth) and Solana (Sol).

The attack has since been converted to the USDC to 1,501 ETH and funds have spread to multiple wallets, per lookonchain. The attack still holds 22.29 million yu in Ethereum and Solana, with an additional 90 million yu left in the polygon, relentless.

Yu, supported by overcollateralized bitcoin (Btc) reserve, is designed to maintain a $ 1 peg. As the project boasts a market cap of $ 119 million, it only has $ 340,000 in USDC’s liquidity in its Ethereum pool, According to to the DEX screener.

After going down to less than $ 0.2046, Yu resurrected at $ 0.917. However, Stablecoin has since under pressure, failing to restore its peg. Yu is currently trading around $ 0.7869 with the Dex Screener.

Cointelegraph handed Yala to comment, but did not receive a response by publishing.

Stablecoin Market is close to $ 300 billion

The Stablecoin market is approaching a $ 300 billion milestone. On Thursday, CoinMarketCap reported $ 300 billion, while Coingecko and Defillama listed $ 291 billion and $ 289 billion, respectively.

After exceeding a $ 200 billion market cap in late 2024, Stablecoin market growth was accelerated, but the Stablecoins still gaining the main adoption, according to Axlar’s growth leader, Chris Robins.