USP Stablecoin

In February 2023 a flash-loan attacker tore through Platypus Finance, the Avalanche exchange whose USP dollar could be borrowed against liquidity positions in its pools. The exploit turned on a logic error: an emergency-withdraw function failed to check whether a user still owed borrowed USP before releasing collateral, letting the attacker mint roughly forty-one million USP against flash-borrowed funds. USP promptly lost more than half its value as the stolen tokens were dumped for other stablecoins, and the roughly eight-and-a-half-million-dollar hack left the protocol effectively dead. Platypus attempted a recovery but never regained meaningful traction, and USP never durably reclaimed its dollar peg. The token is defunct: there is no working redemption and no reliable value behind it. Its story is a textbook case of how a single unchecked function in a lending contract can vaporize a crypto-collateralized stablecoin overnight.