Balance Coin, an algorithmic stablecoin designed to maintain a $1 peg, collapsed by over 99% after a $1 million exploit targeted its bitcoin vaults. The token's value plunged from near its $1 peg to approximately $0.0014, wiping out nearly all of its $3.5 million nominal value. The attacker profited around $912,000 by exploiting a pricing flaw in the protocol's oracle, which allowed them to manipulate the bitcoin price and liquidate vaults improperly. The exploit involved the attacker writing an artificially low bitcoin price into the system, which the lending contract accepted without verification. This enabled the attacker to liquidate multiple vaults and swap the seized collateral for profit. The incident highlights ongoing concerns about DeFi security, especially as AI systems become more advanced.