Liquidity Crunch Breaks Yala's $YU Peg, Revealing Weaknesses in DeFi
- Yala's YU stablecoin plunged 53% from $1 to $0.47 due to Euler platform liquidity crisis and suspected insider USDC-YU pool draining. - Silent governance response and September bridge hack ($7.64M loss) intensified doubts about risk management and rug pull risks. - Market cap dropped to $39.6M with 98.7% trading volume collapse, highlighting DeFi stablecoin fragility amid concentrated liquidity risks. - Yala plans December 15 recovery plan but faces Euler restrictions and partial fund recovery after Octo
The Yala stablecoin (YU) has suffered a sharp decline of almost 53% from its intended dollar value, marking its second significant loss of peg since its debut in May 2025. As of Nov. 16 (UTC), YU had dropped to $0.47,
The loss of peg started at around 10:30 a.m. on Sunday when
On Nov. 18, Yala
This crisis has highlighted weaknesses in DeFi stablecoin frameworks, with analysts
Yala has pledged to
This episode demonstrates the vulnerability of algorithmic stablecoins in unstable markets. Although Yala’s backers—Polychain, Amber, and Galaxy—initially provided institutional support,
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