Citing Bijié Wǎng, the collapse of Terminal Finance in late 2025 has exposed critical vulnerabilities in the DeFi ecosystem, particularly in liquidity strategies and yield generation. The platform, which relied on synthetic assets and opaque yield mechanisms, failed to withstand macroeconomic shocks, including rising U.S. tariffs and fiscal instability. The incident underscores the need for institutional-grade risk management and transparency in DeFi protocols.
Terminal Finance Collapse Highlights DeFi Liquidity and Risk Management Challenges
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