Term Finance kills Meta Vaults after governance process clears path for $8.5 million drain
On-chain fixed-rate lending protocol Term Finance said it permanently shut down its Meta Vaults after a governance exploit, ending new deposits while leaving withdrawals open.
Term Labs said it also revoked the vaults' DAO governance roles.
Blockchain security firm PeckShield separately estimated that 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 confirmed the roughly $8.5 million total or published its own vault-by-vault accounting.
How the exploit moved through governance
Term's governance documentation describes an opt-out system. Vault liquidity-provider token holders can veto queued parameter changes during a seven-day delay, and the change can become executable without a veto.
A DeFiPrime reconstruction of the on-chain activity said an ETH Meta Vault proposal remained open for six days without a veto. Its first actions on execution set the delay cooldown to zero, removing the second waiting period before the transaction routed 2,841.7435 WETH through a newly added strategy to an attacker-controlled address.
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