Loading Ratings...
YU stablecoin depeg sent Yala’s token to $0.20 after an attempted attack, with liquidity gaps keeping it below its $1 peg.
Author: Akshat Thakur
Published On: Sun, 14 Sep 2025 15:37:53 GMT
September 14, 2025 – YU stablecoin depeg shook markets as Yala’s Bitcoin-backed stablecoin dropped as low as $0.2046 after an “attempted attack” early Sunday, failing to restore its $1 peg.
Blockchain analytics firm Lookonchain reported that the attacker minted 120 million YU on Polygon, bridging and selling 7.71 million YU for 7.7 million USDC across Ethereum and Solana. The move drained liquidity pools and triggered the YU stablecoin depeg.
Although YU is backed by overcollateralized Bitcoin reserves, its Ethereum liquidity pool contained only $340,000 USDC, leaving it vulnerable. After the incident, YU traded around $0.7869, still under pressure from lost market confidence.
Yala confirmed the attempted attack in an X post, assuring users that Bitcoin collateral remains safe and under self-custody. The team disabled Convert and Bridge features while working with security firm SlowMist.
“We’ve identified issues and paused product features as a precaution,” Yala said. “Please wait for our green light before re-engaging.” The protocol admitted that additional audits and stricter procedures will be required to prevent another YU stablecoin depeg event.
YU is designed as a Bitcoin-collateralized stablecoin with overcollateralization safeguards. But despite a $119M market cap, its Ethereum pool had only $340K USDC liquidity at the time of the exploit, making recovery difficult.
Thin liquidity combined with the minting exploit amplified price slippage, leaving YU unable to stabilize near its peg.
The incident comes as the stablecoin market nears a $300B milestone, led by Tether (USDT), Circle (USDC), and Ethena’s USDe. But Yala’s YU highlights the fragility of smaller, experimental stablecoins when liquidity is shallow and security issues arise.
Real voices. Real reactions.
@yalaorg what's about the USDC deposit ? Seems almost all has gone
@yalaorg How about people like me who hold $YU?
@yalaorg Solid response. Appreciate the swift transparency and responsible handling — pausing features preemptively is the move. Self-custody and vaults doing their job is reassuring. Looking forward to the post-mortem and seeing how this levels up the stack. Always watching how teams
Our Crypto Talk is committed to unbiased, transparent, and true reporting to the best of our knowledge. This news article aims to provide accurate information in a timely manner. However, we advise the readers to verify facts independently and consult a professional before making any decisions based on the content since our sources could be wrong too. Check our Terms and conditions for more info.
Hifi Finance Faces Binance Delisting, Bitvavo Exit, and Regulatory Heat Amid Price Frenzy
YU Stablecoin Depeg After Yala Attack Attempt
Matrix AI Network Biometric Wallet Secures Blockchain Identity
Doge Flips Standard Chartered in After Explosive 32% Rally
Hifi Finance Faces Binance Delisting, Bitvavo Exit, and Regulatory Heat Amid Price Frenzy
YU Stablecoin Depeg After Yala Attack Attempt
Matrix AI Network Biometric Wallet Secures Blockchain Identity
Doge Flips Standard Chartered in After Explosive 32% Rally
