Resolv Labs‘ stablecoin USR has lost its dollar peg following a security breach in which an attacker used a compromised private key to mint approximately $80 million worth of uncollateralized tokens. The incident has sent USR trading to around 27 cents, a steep drop from its intended one-dollar value. Resolv has since paused its contracts and urged users to refrain from trading the token while recovery efforts continue.
The exploit has left the protocol severely undercollateralized. With roughly $95 million in assets now backing approximately $173 million in outstanding USR, the protocol sits at around 55 percent collateralization. This significant shortfall means the majority of token holders face substantial losses on their holdings.
Users who held USR before the incident and choose to redeem early may recover close to 93 cents on the dollar, according to available figures. However, this partial recovery is only accessible to those who act before the remaining reserves are further depleted. The order in which holders redeem is therefore expected to have a direct impact on individual recovery amounts.
The consequences of the exploit are not limited to USR holders alone. Several DeFi lending markets accepted USR as collateral, and the sudden devaluation of the token is expected to generate bad debt across those platforms. The broader decentralized finance ecosystem may face additional stress as protocols assess their exposure to the now-undercollateralized stablecoin.
Resolv has not yet provided a detailed timeline for recovery or outlined specific steps for restoring the peg. The team’s immediate response has focused on halting further damage by pausing smart contracts and issuing public warnings. The full scope of the incident, including how the private key was compromised, has not been disclosed in available reporting.
Originally reported by CoinDesk.
