Galaxy Supported YU Stablecoin Depeg Crisis: 44% Collapse

The stablecoin YU, associated with the Yala protocol, has drawn attention again with a sharp decline of %52.9 in the last 24 hours. According to CoinMarketCap data, the price of YU suddenly plummeted to $0.44, and its market cap dropped to $39.6 million. Additionally, the trading volume decreased by %98.7, falling to just $11,600, which has raised concerns.

YU initially lost its peg to the dollar between 04:15 and 05:00 in the morning. After a brief recovery attempt, the price dropped again to $0.42, unable to establish a stable value. The Yala team indicated that security vulnerabilities detected in the bridge layer triggered abnormal borrowing activities, putting pressure on liquidity.

This collapse has shaken confidence in the Yala protocol, leading to serious concerns among investors. Particularly in a project backed by key investors such as Polychain, Amber, and Galaxy, this second occurrence of losing its peg has had adverse effects on the stablecoin's reputation. A similar incident occurred about two months ago, which saw YU drop to $0.20 following a significant attack.

At that time, only $1,450 worth of USD Coin (USDC) remained in the Uniswap pool on Ethereum, which increased price volatility and led to YU's rapid collapse. The price later rose to $0.92. During the attack, Lookonchain data revealed that the attacker minted 120 million YU on the Polygon network and sold some of them on different networks to obtain $7.7 million USDC. The attacker then exchanged these funds for 1,501 Ethereum and subsequently distributed the assets to different wallets.

Investors should closely monitor the security status and liquidity level of the protocol following this recent depeg crisis of YU. Additionally, it may be beneficial to make cautious investments in similar situations after these events.