The Bitcoin-backed YU stablecoin is currently facing major issues after an attack caused its value to drop to just $0.20.
Yala’s YU stablecoin usually stays at $1.
According to the team, the attack briefly affected YU’s value and it’s trading at about $0.91 right now.
The team is working with blockchain security experts to investigate what happened.
However, Yala assured users that all funds are safe, with Bitcoin stored securely in vaults or self-custody.
As an additional measure and to prevent further damage, Yala has paused some features like Convert and Bridge.
YU is backed by extra Bitcoin reserves to keep its $1 value stable.
How did the YU stablecoin attack take place?
Blockchain analysts at Lookonchain reported that the attacker created 120 million YU tokens on the Polygon network.
They then swapped 7.7 million YU for 7.7 million USDC on Ethereum and Solana networks.
The attacker turned the USDC into 1,501 ETH and spread the funds across several wallets.
They still hold 22.29 million YU on Ethereum and Solana, plus 90 million YU on Polygon.
After the attack, YU’s price climbed to $0.92 but has since fallen and remains below $1.
