Saga paused its on-chain operations after losing $7 million in an attack, and the stablecoin depegged to $0.75

Layer-1 blockchain protocol Saga has urgently paused its Ethereum-compatible Saga EVM chainlet after experiencing an attack that resulted in a loss of approximately $7 million. The attack led to unauthorized funds being cross-chain transferred and exchanged for ETH, causing its dollar-pegged stablecoin, Saga Dollar, to de-peg, with the price dropping to as low as $0.75. The Saga team stated that the chain was paused at block height 6,593,800.

Preliminary investigations indicate that the incident involved a series of contract deployments, cross-chain operations, and liquidity withdrawals, but there was no consensus failure, validator compromise, or private key leakage; the overall structure of the Saga mainnet remains secure. The impact was not limited to Saga Dollar; its stablecoins Colt and Mustang were also affected. The team has identified the addresses involved in the attack and is working with exchanges and cross-chain bridges to blacklist these addresses. The chain will remain paused until a complete security audit and post-mortem analysis are published.

On-chain data shows that Saga's TVL plummeted from approximately $37 million to $16 million within 24 hours, a decrease of about 55%. Some security researchers speculate that the attack may be related to the "infinite minting" of stablecoins using cross-chain mechanisms, while others believe that the possibility of private key leakage cannot be ruled out, but the officials have not yet confirmed the specific attack vector.