A compromised oracle just killed a DeFi protocol. Full Sail, a capital-efficient yield protocol on the Sui blockchain, is shutting down permanently after an attacker exploited faulty price feeds from oracle provider Switchboard to drain roughly $91,000 from three of its vaults.
The incident, which surfaced on August 29, triggered a cascading response that saw Switchboard halt operations across four separate blockchains. Full Sail isn’t the only casualty either: the linked Virtue Money protocol reported approximately $455,000 in losses affecting 45 users from the same compromised data.
What went wrong
The root cause traces back to Switchboard’s Move-language oracle implementations. Move is the programming language underpinning both Sui and Aptos, and the suspected compromise in Switchboard’s Move-based code meant that price feeds flowing into protocols on those chains were potentially corrupted.
Full Sail had actually implemented multi-oracle validation as a safeguard, a system designed to cross-check price data from multiple sources before acting on it. That defense wasn’t enough. The protocol paused deposits and withdrawals immediately after confirming the incident on August 29, but the damage to its three vaults had already been done.
Switchboard responded by ceasing operations across four chains: Sui, Aptos, IOTA, and Movement.
The wind-down plan
By September 2, Full Sail laid out its shutdown roadmap. The protocol disabled new deposits and halted liquidity provider reward claims, shifting all remaining pools to withdrawal-only mode.
The team committed to distributing remaining liquidity back to users and pledged to cover any shortfalls out of pocket. Full Sail also said it would publish withdrawal and claim guides to walk users through the process of recovering their funds. A comprehensive incident report is expected in the coming days.
Wider damage across the ecosystem
Full Sail’s losses look almost manageable compared to what happened at Virtue Money. That protocol, which also relied on Switchboard’s price feeds, reported losses of approximately $455,000 spread across 45 users. Combined, the two protocols absorbed north of half a million dollars in damage from a single oracle failure.
The fact that Switchboard shut down across four chains, not just Sui, suggests the vulnerability may not have been chain-specific but rather baked into the Move-language oracle code itself.