Polygon-based DeFi protocol SafeDollar has been exploited, leading to its SDO stablecoin crashing to zero

Another decentralized finance protocol (DeFi) appears to have been exploited on Polygon, expanding the list of platforms losing funds. According to the contract address on the Polygon Scan dashboard, $248 million in USDC and Tether (USDT) was withdrawn from the protocol on June 28 while the SafeDollar (SDO) stablecoin has crashed to zero.

SafeDollar contract address loses $248 million

SafeDollar is an algorithmic stablecoin that combines unique features of seigniorage, deflation protocol, and synthetic assets. Earlier this month the protocol airdropped 100,000 dollar-pegged SDO tokens to a number of DeFi communities including bDollar, Iron Finance, MidasDollar, Safemoon, and Quick swap.

According to the contract address on the Polygon Scan dashboard, $248 million in USDC and Tether was withdrawn from the protocol on June 28, in addition to SafeDollar’s entire supply.

However, SafeDollar’s information page on Twitter did not update any information about this attack. The protocol’s Telegram channel confirmed the attack, adding that all activities on SafeDollar were paused while investigations were underway. It issued a warning about the attack and urged users to stop SDO transactions:

the-safedollar-protocol-has-been-exploited-leading-to-its-sdo-stablecoin-crashing-to-zero

Source: SafeDollar Announcements

The value of SafeDollar has dropped to $0, according to the protocol’s website. This is not even the first time this protocol has been exploited. On June 22, SafeDollar detailed an autopsy following an attack that resulted in the loss of 9,959 SDS tokens, valued at around $95,000 at the time.

This protocol has the potential to become the latest Polygon-based platform to experience an exploit or economic meltdown. Earlier this month, the Malt Protocol crashed its elastic algorithm stable supply.

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