"Depeg Crisis in Galaxy-Backed YU Stablecoin: 44% Collapse"

The stablecoin YU, associated with the Yala protocol, attracted renewed attention from investors after a sharp decline of 52.9% in the last 24 hours. According to CoinMarketCap data, YU’s price suddenly dropped to $0.44, and its market capitalization fell to $39.6 million. Moreover, the trading volume plummeted by 98.7%, dropping to only $11.6 thousand, raising concerns.

YU first lost its peg to the $1 mark between 04:15 and 05:00 in the morning. After a brief attempt to recover, the price fell again to $0.42, failing to establish a stable value. The Yala team mentioned that security vulnerabilities identified in the bridge layer triggered abnormal borrowing activities, putting pressure on liquidity.

This collapse shook confidence in the Yala protocol, leading to serious concerns among investors. Especially in a project supported by major investors such as Polychain, Amber, and Galaxy, this second time losing its peg has detrimental effects on the stablecoin's reputation. A similar incident occurred about two months ago, when YU fell to $0.20 following a major 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 a rapid collapse of YU. The price later rose to as much as $0.92. During the attack, Lookonchain data revealed that the attacker minted 120 million YU on the Polygon network and obtained $7.7 million in USDC by selling some of these on different networks. The attacker exchanged these funds for 1,501 Ethereum and subsequently distributed their assets across different wallets.

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