Saga Layer-1 in Crisis as TVL Crashes 55% and Token Plunges 25%, Here’s Why
Saga Layer-1 halted operations after a $7 million exploit on SagaEVM, causing its TVL to drop 55% and its token to fall 25%.Summary
The Layer-1 blockchain protocol Saga is in crisis following a smart contract exploit on its SagaEVM chain on January 21, 2026, which resulted in nearly $7 million in losses. The exploit involved a coordinated sequence of contract deployments and cross-chain activity, allowing attackers to mint Saga Dollar (D) tokens, bridge them to Ethereum, and swap them for ETH on DEXs like 1inch. Saga paused the chain to investigate, confirming that the mainnet and validator security remained intact, though the Saga Dollar briefly lost its $1 peg, falling to $0.75. Consequently, the network's Total Value Locked (TVL) plummeted by over 55% to $16.07 million, and the Saga Dollar token dropped approximately 24.1%. This incident mirrors broader instability in the Cosmos ecosystem, as Mars Protocol also announced a complete shutdown by March 23, 2026, following its own exploit, highlighting systemic risks in L1 smart contract projects and cross-chain vulnerabilities.
(Source：BeInCrypto)