Saga, a layer-1 blockchain protocol, paused its SagaEVM chainlet on Wednesday after a security breach led to the loss of nearly $7 million in funds. This incident resulted in the platform”s dollar-pegged stablecoin, Saga Dollar, losing its peg, plummeting to $0.75 from its intended value of $1.00.
The exploit was detected at block height 6,593,800, prompting the Saga team to act swiftly. The attacker managed to bridge the stolen funds out of the SagaEVM and convert them into Ether. Initial analyses suggest that the exploit stemmed from vulnerabilities in the chain”s precompile bridge contract. The perpetrator was able to mint substantial amounts of Saga Dollars without the necessary collateral.
Data from DefiLlama reveals that the total value locked in the Saga ecosystem fell dramatically, dropping 55% in just 24 hours from over $37 million to approximately $16 million. This rapid decline highlights the significant impact of the exploit on user confidence and liquidity within the platform.
The attack occurred in a broader context of increasing security threats in the crypto space, with Chainalysis reporting total losses exceeding $3.41 billion in 2025, slightly up from the previous year. The incident raised alarms among security researchers, with some indicating that the exploit involved a sophisticated sequence of contract deployments and cross-chain activities.
In the aftermath, the Saga team has taken steps to identify the wallet address associated with the theft and is actively collaborating with exchanges and bridge operators to blacklist it. Additionally, they assured the community that there was no validator compromise or consensus failure, emphasizing that the underlying network infrastructure remains intact.
Security expert Vladimir S pointed out that the exploit likely utilized custom messages that bypassed validations in the bridge logic, enabling the minting of tokens without adequate backing. Another investigator speculated that the breach could have resulted from a private key compromise, although details are still emerging.
The Saga team is now focused on implementing additional security measures to prevent future incidents and plans to release a comprehensive post-mortem once their investigation concludes. With the rising threat of crypto theft, vigilance and robust security protocols are essential for maintaining trust in decentralized finance.
