Home Cryptocurrency SafeDollar ‘stablecoin’ drops to $0 following $248,000 DeFi exploit on Polygon

SafeDollar ‘stablecoin’ drops to $0 following $248,000 DeFi exploit on Polygon

by Serge Shlykov

The team behind SafeDollar, a “stablecoin” project, has lost a lot of money. They lost $248,000 (140 BTC) as a result of a “critical vulnerability” in Polygon’s smart contracts that allowed anyone to withdraw $248,000 worth of stablecoin. The attack was successful, and was followed by a successful “double spend” attack on the same amount of funds.

A key component of cryptocurrency is its ability to be decentralized. Decentralized applications are a series of applications that are not owned by any single person or organization, but rather by a network of users. Polygon, a website dedicated to video games, reportedly was hacked in late May, leaving users’ private keys open to the world. If you were using a cryptocurrency account on Polygon, their website had a fairly simple and easy exploit that allowed them to steal the credentials of anyone who was in possession of their private keys. This is an extremely fortunate situation, because open private keys now mean that anyone who has their private key can now use the cryptocurrency.

On the CryptoCompare DeFi index, SafeDollar, a stablecoin protocol based on proof-of-stake, fell to $0.0024 and then to $0.0017, falling by over 90% in a single day. The crash was precipitated by a bug in the Safecoin protocol that allowed a group of attackers to create a large number of Safecoin tokens.

The price of SafeDollar (SDO), a decentralized financial (DeFi) algorithmic steblecoin based on the Polygon blockchain (MATIC), has literally dropped to zero after what appears to be an achievement today.

⚠️ SafeDollar is operated ⚠️.

The work season is coming to Polygon? https://t.co/evzsUAr695

h/t @RugDocIO

– defiprime (@defiprime) 28. June 2021

Although details are still scarce, blockchain researcher Polygonscan reveals that $202,000 USDDC and $46,000 USDT – with a total value of about $248,000 – were suddenly withdrawn from the SDO smart contract today.

As a result, the price of the SafeDollar, which should always be $1 because it is a stable currency, has dropped to zero, according to the protocol’s own website.

SafeDollar rate dropped to zero

Stablecoins are a particular type of cryptocurrency tokens that are tied to specific fiat currencies, usually the US dollar. They are designed to preserve the value of the assets involved at all times and should, in theory, always be tradable or exchangeable on a one-for-one basis.

In the case of the SafeDollar, a combination of the unique features of seigniorage, deflation protocol and synthetic assets are used as the basis for a stable currency.

SafeDollar takes protective measures

The attack was also confirmed today on a Telegram channel called SafeDollar Announcements. The developers have asked users to stop all transactions with SDO and have reportedly promised to set up a compensation plan in the future.

SafeDollar has been the subject of criticism. We have suspended SafeDollar’s operations and are investigating the matter. IMPORTANT! PLEASE CEASE ALL TRADING IN $SDO. We will announce a post-mortem after an investigation with a compensation plan for lenders, the statement said.

SafeDollar was attacked. Image: Telegram

SafeDollar ‘stablecoin’ drops to $0 following $248,000 DeFi exploit on Polygon

It is interesting to note that this is not even the first time the SDO has been active. Just a week ago, the developers of SafeDollar released a post-mortem on the exploit that resulted in the loss of 9,959 SDS tokens, which were worth about $95,000 at the time.

Like the 17th. In June, Iron Finance, another DeFi project currently migrating to Polygon, saw the price of its Iron Titanium (TITAN) tokens drop by 99% due to an exploit.

(Correction: an earlier version of this article stated that the amount of exploitation was $248 million. The figures have been updated).

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What is a stablecoin? A stablecoin doesn’t move, it doesn’t have features, it doesn’t have nay other features except the idea of having a value that remains constant, but when you ask people what it is, they tell you it isn’t a stablecoin. A stablecoin, in their eyes, is a coin that is traded like a commodity, but it has a constant value.. Read more about sdo token and let us know what you think.

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