Balance Coin Crashes 99% After $915K Exploit Hits 42DAO Protocol

TLDR

• Balance Coin (BLC) lost more than 99% of its value after a suspected exploit on BNB Chain
• Attackers reportedly minted millions of unbacked BLC tokens before swapping them for USDT and BTCB
• Two suspicious transactions extracted an estimated $915,000 from the protocol
• Security firms SlowMist and PeckShield linked the collapse to manipulation of a Bitcoin price oracle
• The exploit affected 42DAO, the governance body behind the Balance Protocol ecosystem

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Balance Coin, an algorithmic stablecoin built to track the US dollar, fell more than 99% on July 22 after blockchain security firms reported a suspected exploit targeting 42DAO on BNB Chain.

The token dropped from near its $1 peg to a record low of $0.001209 in a matter of hours. At the time of writing, CoinMarketCap showed Balance Coin trading around $0.00247, down 99.75% over 24 hours.

Security firm PeckShield estimated losses at around $915,000. The firm linked the collapse to an exploit affecting 42DAO, the decentralized governance organization connected to the Balance Protocol.

#PeckShieldAlert Balance Coin $BLC has plummeted -99% @42dao_official @42dao_official has been exploited for ~$915K pic.twitter.com/1bdRpMQBs3

— PeckShieldAlert (@PeckShieldAlert) July 22, 2026

Blockchain security firm TenArmor reported detecting two suspicious transactions involving GemJoin and 42DAO on BNB Chain. The first transaction minted roughly 4.5 million BLC from a null address and moved the tokens to PancakeSwap V2.

The attacker then swapped the newly minted BLC for Binance-pegged USDT and Binance Bitcoin. Around two hours later, a second transaction used the same method to mint an additional 5,900 BLC and extract more assets from liquidity pools.

How the Oracle Manipulation Worked

SlowMist said the attack exploited a manipulated Binance Bitcoin oracle price that was set abnormally low. This tricked the protocol into treating healthy Bitcoin-backed vaults as eligible for liquidation.

“A single-transaction combo exploited the missing price protection and liquidation delay in a Maker-style system,” SlowMist said. The attacker liquidated multiple BTCB vaults and pocketed the difference.

The minting of unbacked tokens flooded decentralized exchange pools with excess BLC supply. That selling pressure pushed the token sharply away from its dollar target with no mechanism to absorb it quickly.

Unauthorized Minting a Recurring Problem in DeFi

This type of attack has appeared in other protocols. In May, MAPO fell 96% after attackers exploited a bridge flaw to mint unauthorized tokens and dump them into decentralized exchanges.

In another case, Stake DAO faced an exploit where an attacker minted trillions of vsdCRV tokens before swapping them for ETH. Resolv’s USR stablecoin also lost its peg in March after a similar unauthorized minting incident.

Balance Coin operates as the core stablecoin of the Balance Protocol, which is primarily backed by Bitcoin Cash according to its GitBook documentation.

A post-incident report from 42DAO had not been publicly released at the time of writing. Cointelegraph reported that it reached out to 42DAO for comment, but no response had been published.

The available onchain data points to two suspected transactions as the source of the attack, with losses confirmed at approximately $915,000 by security firms.