The stablecoin market experienced another severe upheaval as Balance Coin (BLC), an algorithmic stablecoin on BNB Chain, lost over 99% of its value. The incident followed a suspected exploit involving decentralized organizations 42DAO and GemJoin, resulting in a sharp decline from its $1 target to an all-time low of $0.001209 on July 22.
Suspected attack linked to unauthorized token mintingPeckShield, a leading blockchain security firm, assessed the loss from the suspected exploit at approximately $915,000. The attack came to light when TenArmor, a blockchain analytics provider, observed two suspicious transactions that appeared to be associated with GemJoin and 42DAO. 42DAO is a decentralized organization closely tied to Balance Protocol, which supports the BLC ecosystem.
The first transaction reportedly involved the creation of about 4.5 million BLC tokens from a null address. These freshly minted tokens were quickly transferred to PancakeSwap V2, where they were swapped for Binance-pegged USDT (BSC-USD) and Binance Bitcoin (BTCB). PancakeSwap V2 is a decentralized exchange operating on BNB Chain and facilitates trading of BEP-20 tokens without intermediaries.
Mini dictionary: PancakeSwap V2, an automated market maker decentralized exchange on BNB Chain, allows users to trade cryptocurrencies and provide liquidity directly from their wallets without a central authority.
A second suspicious transaction took place roughly two hours later. The same method was used again, this time to mint an additional 5,900 BLC. These new tokens were also sold into the available decentralized exchange liquidity, facilitating further asset extraction by the attacker.
EventBLC Tokens MintedAssets Swapped ForFirst transaction4.5 millionBSC-USD, BTCBSecond transaction5,900Various assets/liquidityMarket impact and unresolved issuesThe unauthorized minting of large volumes of BLC tokens sharply increased the available supply. As these tokens flooded trading pools, significant selling pressure emerged, pushing the price of the stablecoin dramatically below its intended $1 threshold.
42DAO has not yet released a comprehensive post-incident report, leaving the exact technical vulnerability and the full damage assessment uncertain. In the absence of detailed findings, the wider implications for BLC holders and the broader Balance Protocol ecosystem remain unclear.
Attackers gained the ability to mint new tokens, sell them rapidly, and create intense downward pressure, which caused BLC to lose more than 99% of its value and left the precise technical root of the exploit still unidentified due to limited public disclosure from the protocol’s core teams.
Similar incidents in the DeFi ecosystemThe Balance Coin collapse fits into a pattern of exploits targeting decentralized finance (DeFi) protocols through unauthorized token creation. In May, MAPO, another cryptocurrency, lost 96% of its value after attackers exploited a bridge vulnerability, generated unauthorized tokens, and sold them via decentralized exchanges.
Stake DAO, a decentralized autonomous organization managing various financial products, also faced an incident where an attacker allegedly minted trillions of vsdCRV tokens and swapped them for Ether, causing heavy losses for liquidity providers.
Mini dictionary: Stake DAO is a decentralized autonomous organization that offers automated investment strategies and liquidity products, primarily focused on maximizing returns for users through smart contract driven protocols.
Despite exploiting different weaknesses, these attacks shared a similar outcome. Attackers managed to introduce tokens uncapped by the original supply rules, quickly liquidated them, and triggered extreme price declines.
Unauthorized minting remains a critical vulnerability in DeFi, exposing both protocols and investors to sharp losses when exploited by attackers.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should conduct their own research.
In a landmark development, Stake DAO has unveiled its collaboration with Chainlink, integrating the Chainlink Cross-Chain Interoperability Protocol (CCIP) to facilitate seamless cross-chain transfers of the Stake DAO Token (SDT). This integration marks a significant milestone, extending across key blockchains such as Arbitrum, BNB Chain, and Ethereum mainnets. By leveraging CCIP’s Simplified Token Transfer capabilities, Stake DAO is setting a new standard in interoperability, ensuring secure and efficient transactions within its ecosystem.
Enhancing Security and Accessibility with CCIP Stake DAO’s choice of CCIP underscores a commitment to unparalleled security and reliability in cross-chain operations. Chainlink’s stellar reputation for maintaining robust security standards in the Web3 space, combined with CCIP’s backing by the Risk Management Network, offers Stake DAO an edge in safeguarding cross-chain transfers against potential exploits. This integration not only fortifies Stake DAO’s infrastructure but also expands its reach, making SDT accessible across multiple blockchains and enhancing the platform’s contribution to liquid staking and DeFi governance.
Elevating the Stake DAO Ecosystem The integration of CCIP is poised to revolutionize Stake DAO’s offerings, starting with the expansion of Liquid Lockers to diverse blockchains. The recent launch of the CAKE Liquid Locker on PancakeSwap for the BNB chain is just the beginning. The addition of SDT to various chains is anticipated to introduce innovative features, including the veSDT boost, further enriching the Stake DAO ecosystem and its user experience.
Key Advantages of Chainlink CCIP Integration Stake DAO’s partnership with Chainlink through CCIP brings a suite of benefits critical to securing cross-chain SDT transfers. The decision is backed by CCIP’s proven track record in securing substantial on-chain transaction value and its advanced features, including:
Time-tested Security: Powered by decentralized oracle networks, CCIP ensures a high standard of security and reliability. Secure Token Transfers: With audited token pool contracts, CCIP simplifies the complexity of cross-chain transactions, incorporating additional security measures such as rate limits. Programmable Transfers: CCIP’s programmability allows for the transfer of tokens and arbitrary data in a single transaction, broadening the scope of cross-chain interactions. Future-proof Technology: CCIP’s architecture is designed for scalability, supporting continuous updates and new functionalities, thereby safeguarding against obsolescence. A Forward-Looking Collaboration Stake DAO’s integration of Chainlink CCIP heralds a new era in cross-chain interoperability, promising a more interconnected and secure blockchain ecosystem. This collaboration not only enhances Stake DAO’s operational capabilities but also contributes to the broader adoption and growth of liquid staking and DeFi governance.
As the Stake DAO and Chainlink partnership flourishes, the vision for a more accessible and secure decentralized finance landscape comes into clearer focus, underscoring the transformative potential of strategic technological alliances in the blockchain industry.
AUTHOR
Max delves deep into the cryptocurrency realm, with a passion for altcoins and NFTs. Convinced of crypto's transformative potential, he envisions a decentralized financial future. Max's background in the financial sector grants him unique insights into global monetary systems. In his leisure, Max embraces the thrill of adventures and is an avid sports enthusiast, finding balance and rejuvenation away from work.
Stake DAO has recently disclosed a huge landmark for the $CRV Liquid Locker thereof which has witnessed a remarkable spike in activity. As per Stake DAO, the Liquid Locker currently holds up to 113M $CRV coins locked in the form of $sdCRV, denoting a substantial 75% growth during the recent couple of months. The company took to its official social media account on X to provide the details about this achievement.
$CRV Liquid Locker of Stake DAO Experiences a 75% Growth In its recent X post, Stake DAO noted that this swift surge regarding locked coins is very beneficial for Stake DAO’s platform. This reportedly signifies the expansion in the trust and popularity of the company. In addition to this, it also points toward an increase in $CRV’s strategic value within the wider DeFi ecosystem. The $CRV Liquid Locker’s growth is crucial specifically in line with the DeFi platforms’ competitive nature.
Hence, a 75% jump of $sdCRV in only a couple of months signals a resilient consumer engagement. Moreover, it also highlights the increasing confidence among the community about the offerings of Stake DAO. As a result of this spike, the total value locked has reached 113M $CRV. This is a significant figure, indicating the ability of the platform to get and retain consumers.
The Locked 113M $CRV Account for the cumulative $veCRV supply’s 14% The growth of the $CRV Liquid Locker additionally poses wider implications for the ecosystem of Curve Finance. According to Stake DAO, the locked 113M $CRV in the form of $sdCRV presently denotes fourteen percent of the cumulative $veCRV supply. This highlights that several Curve Finance consumers are locking $CRV via the Liquid Locker of Stake DAO.
AUTHOR
Umair Younas is a cryptocurrency-related content writer linked with this work since 2019. Here, at Blockchainreporter, he serves as a news and article writer. He is a crypto, blockchain, NFTs, DeFi, and FinTech enthusiast. He has strong command over writing authentic reviews about brokers and exchanges and he has collaborated with our education team to write educational content as well. He has a dream to raise awareness among people about digital currencies. His works are well-researched and brimmed with information hence they provide fresh insights. Stay tuned to his posts if you want to stay up-to-date with the crypto-verse.
Analysis: Bitcoin miners face profit pressure, with around 20% of mining firms now operating below the break-even point.
Bitcoin miners' revenue continues to decline, with the current 7-day average daily income dropping to around $30 million, a notable pullback from the over $50 million level seen last summer. Meanwhile, on-chain transaction fee revenue has fallen to less than $250,000, accounting for an extremely small share of miners' total income. Data from JPMorgan Chase shows the average production cost is approximately $78,000, and Bitcoin’s price has remained below this level for five consecutive months — the longest such stretch in the current cycle. An estimated 20% of miners are already operating at a loss; some high-cost miners have begun frequently powering their mining rigs on and off in response to price fluctuations, leading to a stronger correlation between network hash rate difficulty and Bitcoin’s price. Additionally, Bitcoin’s mining difficulty was adjusted down by roughly 10% in the second week of June, marking the second pullback of the same magnitude this year. Publicly listed mining companies, meanwhile, are relying more on their balance sheets to sustain operations, selling over 32,000 BTC in the first quarter alone to cover operating costs. Analysts note that against the backdrop of continuously shrinking block subsidies and stagnant fee revenue, a recovery in miners’ profits will primarily depend on a rise in Bitcoin’s price.
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Stake DAO, a DeFi platform focused on automated yield strategies, is facing an ongoing exploit, multiple blockchain security firms reported on Wednesday.
The attacker minted over 5.4 trillion vsdCRV on Arbitrum and is actively swapping it for ETH, Blockaid noted on X. PeckShield said that, so far, some of the tokens had been swapped for 43.78 ETH ($91,000) and bridged to Ethereum.
vsdCRV, or vote-boosted sdCRV, is a yield-related derivative token tied to the Curve Finance ecosystem and used within Stake DAO.
Stake DAO said it was aware of the situation and urged users not to interact with vsdCRV.
The suspected root cause is a compromised Stake DAO deployer private key, the researchers said.
"The attacker appears to have obtained the deployer's private key and set an arbitrary peer for vsdCRV," BlockSec explained. "Using that peer, they forged a malicious message that triggered unconditional minting of ~5.44T vsdCRV to their address."
The exploit continues one of the worst periods for DeFi exploits, seemingly driven by advancements in artificial intelligence, with dozens of protocols hacked for more than $600 million since April, led by the $292 million exploit of Kelp DAO. On Tuesday, crypto security firm OpenZeppelin's Manuel Aráoz said that he considers "all of DeFi" unsafe, citing the asymmetry between attackers and defenders.
Sodot co-founder and CPO Shalev Keren told The Block that the Stake DAO exploit is structurally similar to the Wasabi incident last month and several other deployer-key compromises this year.
"The Stake DAO deployer key on Arbitrum was used to repoint the vsdCRV cross-chain bridge configuration to an attacker-controlled contract on Ethereum, and about twenty-five seconds later, that contract sent a LayerZero message back across, causing the legitimate Arbitrum token to mint over five trillion vsdCRV to the attacker, who is now dumping it for ETH," Keren said. "There is no smart-contract bug here, and no flaw in LayerZero, there is one private key, controlling one privileged configuration function, with no multisig and no delay between the configuration change going through and the mint clearing onchain."
Keren added that the incident highlights broader concerns around operational security and the concentration of privileged deployer permissions tied to audited DeFi protocols.
This is a developing story.
Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.
Stake DAO, a non-custodial liquid staking platform, became the target of a major exploit on Arbitrum after hackers allegedly compromised the protocol’s deployer private key, enabling the minting of more than 5.4 trillion vsdCRV tokens through a manipulated cross-chain messaging infrastructure, according to security firm Blockaid.
🚨 Blockaid detected an ongoing exploit targeting@StakeDAOHQ on Arbitrum.
The attacker just minted over 5.4 trillion vsdCRV and is actively swapping it for ETH.
More details in 🧵
— Blockaid (@blockaid_) May 27, 2026
Investigators said the attacker took control of the Stake DAO deployer address and altered the LayerZero v2 OFT peer configuration linked to the vsdCRV token contract.
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By redirecting trust from the legitimate Ethereum-side adapter to an attacker-controlled malicious contract, the hacker was able to send a forged cross-chain message that generated roughly 5.4 trillion new vsdCRV tokens, Blockaid explained.
Despite the exploit generating a nominal value estimated at $763 billion, the attacker struggled to convert the tokens into actual cash because of severely limited liquidity in vsdCRV markets.
On-chain analyst EmberCN reported that only 16.83 million tokens were exchanged for about 43.7 ETH, or roughly $91,000, before DEX liquidity dried up.
Stake DAO said that they were aware of the situation and warned users not to interact with vsdCRV.
We are aware of the ongoing situation.
Please do not interact with vsdCRV. https://t.co/3wZhMo52r6
— Stake DAO (@StakeDAOHQ) May 27, 2026
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
Stake DAO is facing an ongoing exploit tied to its vsdCRV token on Arbitrum. Blockchain security firm Blockaid said an attacker minted more than 5.4 trillion vsdCRV and began swapping the tokens for ETH.
Summary
Stake DAO warned users not to interact with vsdCRV as the exploit remained active. Security researchers said an attacker minted about 5.4 trillion vsdCRV on Arbitrum before swapping funds. The suspected cause was a compromised deployer key used to alter LayerZero peer settings. Stake DAO confirmed it was aware of the situation and told users not to interact with vsdCRV. The project’s warning came as researchers continued tracking the attacker’s activity across Arbitrum and Ethereum.
vsdCRV, or vote-boosted sdCRV, is tied to the Curve Finance ecosystem and used within Stake DAO’s yield products. The token became the center of the incident after the attacker allegedly gained enough control to mint a huge supply.
PeckShield said part of the minted funds had already been swapped for 43.78 ETH, worth about $91,000, and bridged to Ethereum. The incident remains a developing story, and final loss figures may change as more transactions are traced.
Source: PeckShield/X Researchers point to deployer key compromise Blockaid said the suspected root cause was a compromised Stake DAO deployer private key. According to the firm, the attacker used that access to reconfigure the LayerZero v2 OFT peer for the vsdCRV token contract.
That change allegedly redirected trust from the legitimate Ethereum-side adapter to a malicious contract controlled by the attacker. The attacker then sent a forged cross-chain message that triggered the minting of roughly 5.44 trillion vsdCRV.
BlockSec described the attack as a case where the attacker appeared to obtain the deployer’s private key and set an arbitrary peer for vsdCRV. The firm said the forged message then caused unconditional minting to the attacker’s address.
.@StakeDAOHQ was reportedly exploited via a deployer key compromise, resulting in ~5.44T $vsdCRV minted to the attacker. The attacker appears to have obtained the deployer’s private key and set an arbitrary peer for $vsdCRV. Using that peer, they forged a malicious message that…
— BlockSec Phalcon (@Phalcon_xyz) May 27, 2026 The incident shows how privileged access remains a major risk in DeFi. Even when smart contract code works as designed, a compromised deployer key can give attackers the ability to change trusted settings and trigger losses.
DeFi security concerns deepen The Stake DAO exploit follows a series of recent DeFi incidents. As previously reported by crypto.news, OpenZeppelin co-founder Manuel Aráoz said he now considers “all of DeFi” unsafe and has advised friends and family to exit DeFi positions.
Aráoz argued that coding agents are becoming strong tools for finding vulnerabilities, while defenders still need to fix every weakness before attackers find one. His comments came as DeFi protocols lost about $629.7 million to hacks in April.
Separately, Wasabi Protocol lost more than $5 million across Ethereum, Base, Berachain, and Blast after a compromised admin key allowed attackers to upgrade contracts and drain funds.
That case resembles the current Stake DAO concern because both incidents involved privileged key access rather than a simple market manipulation event. Wasabi also warned users not to interact with its contracts while the team investigated.
Cross-chain risks remain in focus The Stake DAO incident also points back to cross-chain token risks. Security reports have tracked repeated attacks involving bridges, peer settings, and message validation across chains in 2026.
BlockSec’s May security roundup listed multiple incidents across Ethereum, Sui, BNB Chain, Base, Blast, and Berachain, with total losses of about $15.9 million over a two-week period. Its blog also identified Wasabi as a key-compromise case.
In April, Kelp DAO suffered one of the year’s largest DeFi exploits after attackers drained about $292 million from a LayerZero-powered bridge. The breach raised concerns about cross-chain asset backing across more than 20 networks.
