Stablecoin Yalla (YU), 'dollar peg' collapse… briefly plunged to $0.2

JOON HYOUNG LEE

Summary

Yalla (YU)'s dollar peg collapsed, and its price briefly plunged to the $0.2 range.
There is analysis that Yalla, invested in by global venture capital Polychain Capital, suffered a major blow to its credibility.
Yalla said it has taken security enhancement measures in response to a hacking attempt and announced a temporary suspension of some services.

A dollar stablecoin 'Yalla (YU)' experienced a collapse of its dollar peg. As a result of the peg collapse, Yalla's price briefly plunged to the $0.2 range.

On the 14th, according to DEX Screener, Yalla's price fell as low as $0.2074 that day. Yalla's price has since recovered to the $0.93 range. Ublockchain said, "In the Yalla/Circle (USDC) liquidity pool on the decentralized exchange (DEX) Uniswap, only $1450 of Circle liquidity remains."

Yalla is a stablecoin invested in by global venture capital Polychain Capital. Because it is a dollar-based stablecoin, there is analysis that its price briefly plunging to $0.2 could deal a significant blow to its credibility.

*Stablecoin Yalla (YU) price trend. Photo courtesy of DEX Screener*

The collapse of Yalla's dollar peg is believed to stem from a hacking incident. A Yalla spokesperson said, "There was a recent attempted attack that temporarily affected Yalla's pegging," and added, "We confirmed the issue through prompt cooperation with our security partner and are implementing remedial measures to strengthen the system."

They also warned of partial service outages. Yalla said, "As part of security hardening work, conversion and bridge functions will be temporarily unavailable," calling it "a measure to ensure overall stability." It added, "All other protocol functions are unaffected and user assets are safe."

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