Yala’s YU stablecoin fails to restore peg after ‘attempted attack’

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Oh, the drama of the crypto world never ceases to entertain! Yala’s Bitcoin-backed stablecoin, YU, decided to take a little nosedive after what can only be described as an “attempted attack” early Sunday. The token plummeted to a staggering $0.2046-about as stable as a house of cards in a windstorm. But don’t worry, Yala’s team assured us in their post on X that they’re on the case. They’re working with SlowMist, a blockchain security firm, and other partners to investigate the breach. All in a day’s work, right?

But wait, there’s more! In their latest update, Yala promised that all funds are “safe.” Oh, thank goodness! They even clarified that the Bitcoin deposited with them is still self-custodial (whatever that means) or locked away in vaults-no funds were lost in the chaos. Apparently, they’ve paused some product features to deal with this mess. They even threw in a bit of suspense, asking users to “wait for our green light” before re-engaging. Gee, thanks for keeping us on the edge of our seats.

To stabilize the situation-because, apparently, that’s still a thing in the world of stablecoins-Yala decided to disable its Convert and Bridge features. But don’t fret, the rest of the protocol functions are “unaffected” and user assets are “safe.” Phew! Everything’s under control… kinda.

Attacker reportedly mints 120 million YU

Hold on, there’s a plot twist! While Yala didn’t spill the beans on whether the hack was successful, blockchain analytics firm Lookonchain claims the attacker wasn’t just a casual observer. No, they decided to go all out by minting 120 million YU tokens on Polygon (MATIC). Then they bridged and sold 7.71 million YU for 7.7 million USDC across Ethereum (ETH) and Solana (SOL). Talk about a crypto heist!

And what did the attacker do next? Oh, just converted the USDC into 1,501 ETH, then dispersed it across multiple wallets. Classic move. As of now, the attacker still holds 22.29 million YU on Ethereum and Solana, with a cozy 90 million YU still hanging out on Polygon, unbridged. No big deal.

Let’s not forget: YU is supposed to be backed by overcollateralized Bitcoin (BTC) reserves. In theory, it’s supposed to stay as stable as a rock at a $1 peg. But in reality, the market cap of $119 million doesn’t quite cut it when you’ve only got $340,000 in USDC liquidity in the Ethereum pool. Let’s be honest, that doesn’t even buy a decent coffee at a fancy cafe.

After dropping to an eye-watering $0.2046, YU did make a brief comeback, soaring to $0.917. But, of course, stability isn’t its strong suit. It’s been under pressure and still can’t restore its peg, currently trading at a humble $0.7869 on DEX Screener. It’s a rollercoaster, folks!

CryptoMoon reached out to Yala for comment but, surprise, surprise-no response by publication time. Guess they’re busy trying to sort out their little crypto crisis.

Stablecoin market nears $300 billion

But wait, there’s a bright side! The stablecoin market is now nearing a $300 billion milestone. Yes, you read that right. On Thursday, CoinMarketCap reported it was at $300 billion, while other sources like CoinGecko and DefiLlama reported $291 billion and $289 billion, respectively. Who’s counting?

After hitting a $200 billion market cap in late 2024, the stablecoin market is growing faster than you can say “volatility.” But, according to Chris Robins, Axelar’s head of growth, stablecoins still haven’t achieved mainstream adoption. So, while $300 billion is a nice round number, we’re not exactly in the “everyone’s doing it” phase just yet. Big players like Tether (USDT), Circle’s USDC, and Ethena Labs’ USDe are leading the charge-but it’s still anyone’s game.

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2025-09-14 16:19