Resolv Labs temporarily halted its protocol after an attacker minted 80 million unbacked USR stablecoins on Sunday, sending the token sharply off its dollar peg and briefly plunging it to $0.14. On Monday evening the Resolv Foundation announced all protocol functions were paused “to contain the impact of the exploit,” freezing Season 4 airdrop claims and staking and unstaking of RESOLV tokens.
Resolv said the collateral pool remained intact and that no underlying assets were lost, despite on-chain analysis showing the attacker converted most of the minted USR into Ether (ETH) and sold roughly $25 million. USR is trading well below its intended peg, around $0.24.
In an on-chain ultimatum, Resolv offered the exploiter a white-hat-style deal: return 90% of the converted funds (about $25 million in ETH) plus all remaining USR within 72 hours, keep 10% as a bounty, and cease activity—or face escalation including coordinated asset freezes with exchanges and bridges, public tracing and law enforcement. There have been no movements from the main wallet since the ultimatum.
Web3 security firm Cyvers’ VP of GTM and strategy, Michael Pearl, said redemptions have reopened only for legitimate pre-exploit holders while Resolv and partners continue tracing “bad USR” and preparing a full post-mortem.
Beyond Resolv, the incident has reopened fears from the 2022 Terra collapse, when an algorithmic stablecoin failure erased tens of billions in value and reshaped risk perceptions for stablecoins. Pearl said the USR depeg “opened a Pandora’s box,” noting the exploit triggered roughly $180 million in liquidations on lending protocol Morpho and about $334 million in outflows from lending and liquidity platform Fluid, though overall spillover has been limited. He warned that because DeFi is deeply intertwined with stablecoins, a serious failure at the stablecoin layer can threaten an entire protocol or company.
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