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Term Finance shuts Meta Vaults after governance exploit

The protocol stopped new deposits after the exploit, which security firm PeckShield estimated removed about $6.9 million in value across Meta Vaults.

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Term Finance said it permanently shut down its Meta Vaults after a governance exploit. The protocol ended new deposits but kept withdrawals open, while it coordinated with outside security teams on remediation and recovery. Term has not confirmed the total losses or published vault-by-vault accounting.

PeckShield estimated the attacker removed about 2,843 ETH worth $6.87 million and 1.68 million USDC, which was swapped for roughly 1.68 million DAI. Term has not verified the roughly $8.5 million total and said it is still verifying the scope of the incident, limiting confirmed impact to the Meta Vault product rather than all Term lending and borrowing markets.

According to a DeFiPrime reconstruction, an ETH Meta Vault governance proposal sat open for six days without a veto. After execution, Term’s actions reportedly set the delay cooldown to zero, removing a waiting period, and routed 2,841.7435 WETH through a strategy to an attacker-controlled address at 06:25 UTC on Aug. 23.

A second transaction about 22 minutes later executed five proposals across five USDC vaults and removed 1,679,639.29 USDC, the analysis said. Term said its underlying protocol and direct borrowing and lending markets had not been affected based on its investigation so far, and it did not commit to reimbursing depositors or provide a recovery timetable.

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