Term Finance Recoups $1M—But Oracle Glitch Still Costs DeFi Protocol $600K in Bloody Liquidation
Another day, another oracle failure shaking crypto’s fragile house of cards. Term Finance clawed back seven figures after a price feed error triggered $1.6M in forced liquidations—proof that even ’trustless’ systems still rely on centralized data points.
The protocol’s damage control? Textbook crisis management. But the remaining $600K shortfall exposes DeFi’s dirty secret: your smart contracts are only as smart as their weakest oracle link.
Meanwhile, traditional finance snickers into their spreadsheets—because nothing says ’maturity’ like losing half a million to a data glitch.
Term Finance Clarifies Oracle Incident Was a Bug, Not a Hack
Addressing concerns raised by security analysts, Term Finance clarified that the incident was not the result of a hack. Instead, a bug in an updated ETH oracle caused the liquidation error.
“No smart contracts were exploited, and user funds were not directly targeted,” the team emphasized.
However, details regarding the negotiation process for the returned funds remain undisclosed, and Term Finance has yet to provide further comment.
An update on our ongoing recovery efforts after yesterday’s oracle issue:
The total outstanding loss is now 362.03 ETH (~$650K) — significantly reduced from the original 918 ETH impact.
Of the original loss:
223.197 ETH was captured internally,
333 ETH was successfully…
This oracle mishap adds to a growing list of recent vulnerabilities within the DeFi sector.
Just days earlier, Solana-based platform Loopscale suffered a $5.8 million exploit, while crypto exchange Bitget reported a $20 million loss after coordinated manipulation of a lesser-known token market.
Bitget has announced legal action against eight accounts linked to the incident.
Additionally, Impermax Finance fell victim to a flash loan attack over the weekend, resulting in losses exceeding $150,000, according to security firm TenArmor.
The protocol confirmed the breach, promising a detailed post-mortem once investigations conclude.
Recoveries in such cases remain inconsistent across the industry.
Bybit CEO Ben Zhou recently disclosed that following a $1.4 billion hack in February, nearly 28% of the stolen funds had become untraceable after being laundered through mixers and peer-to-peer platforms.
Only a fraction (3.84%) has been successfully frozen.
Crypto Lost $1.6 Billion to Hacks in Q1
In the first three months of 2025, the crypto ecosystem lost a whopping $1,635,933,800 across 39 incidents, according to the blockchain security platform Immunefi.
The report claimed, “Q1 2025 marks the worst quarter for hacks in the history of the crypto ecosystem.”
Most of that was the result of only two hacks of two centralized exchanges. Phemex suffered a $69.1 million loss in January, while Bybit lost $1.46 billion in February.
Subsequently, the total number of losses in the first quarter marks a 4.7x increase compared to Q1 2024. At that time, hackers and fraudsters stole $348,251,217.
Notably, experts assume that the infamous North Korean Lazarus Group is behind the two largest attacks. They stole $1.52 billion, which is 94% of total losses.
