Sui DeFi Protocol Full Sail to Shut Down After $91K Switchboard Hack

Full Sail, a decentralized finance (DeFi) protocol on the Sui blockchain, has announced it will wind down operations following a security incident involving oracle provider Switchboard that drained approximately $91,000 from three of its automated vaults. In a post on X on Tuesday, the Full Sail team said it has immediately disabled new deposits and liquidity provider (LP) reward claims, while regular pools will transition to withdrawal-only mode after final security checks. The protocol stated that compensating affected users is its top priority and that withdrawal and claim instructions will be published in the coming days.

The incident stems from a suspected compromise of Switchboard's oracle infrastructure, which Full Sail first disclosed on Saturday after confirming a loss of funds. Switchboard acknowledged the issue in a separate X post, saying it was investigating a potential compromise of its Move-based implementations and had halted its network across Aptos, Sui, IOTA, and Movement as a precaution. An attacker subsequently exploited the vulnerability to remove roughly $91,000 from three Full Sail vaults, according to the protocol's updated assessment.

The fallout extended beyond Full Sail. Virtue, a stablecoin lending protocol on IOTA, separately reported approximately $455,000 in losses tied to the same Switchboard compromise and warned that the backing of its VUSD stablecoin had been impaired. To address the damage, Full Sail said it will deploy its remaining protocol-owned liquidity to compensate users, with the team covering any shortfall to ensure community depositors are repaid first. The episode highlights the systemic risks posed by shared oracle infrastructure in DeFi, where a single point of failure can cascade across multiple protocols and blockchain networks.