Term Finance recovers $1 million loss from oracle error

Ethereum-based (CRYPTO:ETH) lending protocol Term Finance announced it recovered $1 million of the $1.6 million lost due to a misconfigured oracle that caused faulty liquidations in its Treehouse (tETH) market.

The incident occurred on Saturday when a bug in an updated ETH oracle triggered erroneous liquidations, resulting in a total loss of 918 ETH, approximately $1.6 million.

Term Finance reported that 223.197 ETH (around $400,000) was captured internally, while 333 ETH (approximately $600,000) was recovered through negotiations.

The outstanding loss now stands at 362.03 ETH, roughly $650,000, significantly reduced from the initial impact.

“No smart contracts were exploited, and user funds were not directly targeted,” Term clarified, emphasising that the event was not a hack.

Details of the negotiations to recover funds remain unclear, and Term Finance did not provide further comment when contacted.

The team plans to cover the remaining deficit from the protocol’s treasury and intends to release a detailed post-mortem report.

This oracle misconfiguration adds to a series of recent DeFi incidents, including a $5.8 million exploit of Solana’s Loopscale platform and a $150,000 flash loan attack on Impermax Finance.

Impermax Finance confirmed the flash loan drained its V3 pools and promised a post-mortem after verification.

Recovery rates for crypto hacks vary widely; for example, Bybit’s CEO noted that nearly 28% of funds lost in a February 2025 attack have become untraceable after laundering efforts.