Not So Safe: SafeDollar Stablecoin Falls to $0 After Exploit

The price of SafeDollar, a DeFi stablecoin built on the Polygon blockchain, plummeted to $0 today after an attacker exploited a vulnerability in its liquidity pool.

The team is yet to conclude its post-mortem of the attack. SushiSwap core developer Mudit Gupta said that the attackers looted about $250,000 worth of stablecoins from the platform’s liquidity pools, then dumped those coins on the market by selling them on PolyDex.

Gupta said that hackers managed to mint an infinite number of SDO stablecoins by exploiting the yield rates offered by the platform.

On Monday, SafeDollar’s team told its Telegram channel that it has “paused activities on SafeDollar and [is] investigating the matter." Once the investigation has concluded, the team will publish a plan to compensate liquidity providers.

This is SafeDollar’s second major attack since it launched earlier this month. An attack on June 20 resulted in the loss of 9,959 SDS, the protocol’s share tokens, worth around $95,000 at the time.

“If anything has "Safe" in its name, it's usually not Safe,” concluded Gupta. “My condolences to those who got rekt in this. It's an ape eats ape world out there, stay safe.”