Polygon-Based Defi Stablecoin Safedollar Plunges to Zero — Team Is Investigating Exploit

The algorithmic decentralized finance (defi) stablecoin safedollar (SDO) has been attacked, according to statements published on its Telegram channel. The safedollar token did not remain stable following the attack, as the defi stablecoin’s price collapsed to zero.

Safedollar Stablecoin Price Collapses

A Polygon (MATIC) blockchain-based stablecoin called safedollar (SDO) has lost all of its value, according to crypto market aggregation sites and even the official website safedollar.fi. The website shows the price per SDO is zero and members of the algorithmic defi stablecoin community got wind of an attack via the project’s official Telegram channel.

“Safedollar has been under attack,” the Safedollar administrator’s pinned statement to the Telegram channel notes. “We have paused activities on safedollar and [are] investigating the matter. Important: Please stop all trading related to $SDO. We will announce the post-mortem after the investigation is done with [a] compensation plan for Liquidity Providers. All Seed Pools are SAFU. Please withdraw [your] funds. We will keep you updated [on the] latest status in this channel.”

Polygon-Based Defi Stablecoin Safedollar Plunges to Zero — Team Is Investigating Exploit
Screenshot via safedollar.fi.

Details on the attack have yet to emerge but the contract shown on Polygonscan indicates that over 200,000 USDC and 46,000 USDT was siphoned from the SDO smart contract. This drainage resulted in the complete collapse of the value of SDO and community participants on Telegram are not very pleased. Many are awaiting official news from the administrator and wondering if compensation will take place.

Safedollar Was Attacked Six Days Before SDO Plummeted

Interestingly, six days ago, the stablecoin defi project Safedollar published a post-mortem analysis of another attack that preceded the recent collapse. On June 20, the project’s team members said “Safedollar was recently the subject of an exploit that resulted in a loss of 9,959 SDS.” The team’s post-mortem concluded that the “Safedollar protocol is working normally and functions are not affected.”

Safedollar joins a growing list of stablecoins that have faltered and fallen below the expected dollar peg. In November 2020, the defi protocol Origin suffered from a massive flash loan attack and the protocol’s stablecoin OUSD plunged by 85%. In April 2021, the VC-backed stablecoin Fei Protocol dropped below the USD peg. However, both of those stablecoins have managed to regain their USD parity, as OUSD is swapping for $0.99 and FEI is trading for approximately $1 at the time of writing.

What do you think about the Safedollar project stablecoin plummeting to zero? Let us know what you think about this subject in the comments section below.

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