Term Finance kills Meta Vaults after governance process clears path for $8.5 million drain
On-chain fixed-rate lending protocol Term Finance stated it completely shut down its Meta Vaults after a governance exploit, ending new deposits whereas leaving withdrawals open.
Term Labs stated it additionally revoked the vaults’ DAO governance roles.
Blockchain safety agency PeckShield individually estimated that the attacker removed about 2,843 ETH price $6.87 million and 1.68 million USDC, which was swapped for roughly 1.68 million DAI.
Term has not confirmed the roughly $8.5 million whole or printed its personal vault-by-vault accounting.
How the exploit moved via governance
Term’s governance documentation describes an opt-out system. Vault liquidity-provider token holders can veto queued parameter adjustments throughout a seven-day delay, and the change can turn out to be executable and not using a veto.
A DeFiPrime reconstruction of the on-chain exercise stated an ETH Meta Vault proposal remained open for six days and not using a veto. Its first actions on execution set the delay cooldown to zero, eradicating the second ready interval earlier than the transaction routed 2,841.7435 WETH via a newly added technique to an attacker-controlled tackle.
The Ethereum transaction occurred at 06:25 UTC on Aug. 23. A second transaction about 22 minutes later executed 5 proposals throughout 5 USDC vaults and eliminated 1,679,639.29 USDC, based on the identical evaluation.
Term has not printed a postmortem confirming how the proposer obtained authority to queue these actions or why the veto and delay controls didn’t cease them.
Yearn said Term’s vault contracts use Yearn V3 structure, however the exploit occurred via Term’s customized governance wrapper. It stated the assault vector doesn’t apply to plain Yearn vault setups and that normal Yearn vaults have been unaffected.
Term equally stated its underlying protocol and direct borrowing and lending markets had not been affected based mostly on its investigation up to now, whereas including that it was nonetheless verifying the scope. That limits the confirmed influence to the vault product reasonably than each Term market.
The remaining query is what Meta Vault customers can recuperate. Because Term has not confirmed the ultimate accounting, preserving withdrawals open doesn’t by itself set up the liquidity or worth accessible for each withdrawal.
Term stated it was coordinating with outdoors safety groups on remediation and restoration. If a shortfall stays, it stated it might discover methods to handle it. The firm didn’t decide to reimburse depositors or present a restoration timetable.
The submit Term Finance kills Meta Vaults after governance process clears path for $8.5 million drain appeared first on CryptoSlate.
