Sui Chain DeFi Protocol Full Sail Announces Liquidation: $91,000 Lost Due to Attack on Oracle Switchboard

Coin Circle (120BTC.cOM) reports: On Tuesday, Beijing time, the DeFi protocol Full Sail, built on the Sui public chain, officially announced the termination of its operations. The immediate trigger for this closure was a severe security incident involving its oracle provider Switchboard, which led to approximately $91,000 being illegally withdrawn from Full Sail's three automated vaults.

In a statement released on the official X platform, the Full Sail management team stated that the decision to implement liquidation was made after a comprehensive security audit. Currently, the protocol has urgently cut off the reward claiming channel for liquidity providers (LPs), and the regular funding pools have been switched to a withdrawal-only status. In the subsequent aftermath, the team will prioritize protecting the rights of affected users, utilizing all remaining liquidity of the protocol and additionally funding the gap themselves to achieve a substantial full compensation.

Four Public Chains Sound the Alarm

The source of this crisis can be traced back to last week, Beijing time, when the oracle service provider Switchboard's infrastructure first detected signs of suspected intrusion. After Full Sail disclosed the loss of funds on Saturday, Beijing time, it decisively halted all deposit and withdrawal operations.

Also on Saturday, Beijing time, Switchboard officially confirmed that its underlying code implementation based on the Move language may have been compromised by hackers, and promptly cut off the network connections of this component on the Aptos, Sui, IOTA, and Movement public chains. This means that at the same time, all DeFi protocols calling this oracle on these four chains were directly exposed to extreme risks of price data distortion or stagnation.

As another victim of this incident, the stablecoin lending protocol Virtue deployed on the IOTA chain also released a damage report on Saturday, confirming losses of approximately $455,000, and admitted that the underlying asset reserves of its VUSD stablecoin had been significantly impacted. These two losses totaling over $540,000 point to the same data source supplier. Although the amount involved for Full Sail is relatively small, its decisive liquidation measures indicate that after experiencing a crisis of underlying trust, it is better to exit in an orderly manner to protect user interests than to continue operations with systemic risks.

Frequent Security Crises in the Sui Ecosystem

Analyzing the industry context reveals that Full Sail is not the first decentralized finance protocol in the Sui public chain ecosystem to fall due to security vulnerabilities. Looking back over the past year, this public chain has experienced several notable incidents of capital loss:

• April 2026: The Volo protocol was hacked, losing $3.5 million, and the team subsequently announced it would bear all losses.
• April 2026: The Scallop network was attacked, losing 150,000 SUI, and the official promised full compensation.
• April 2026: The liquidity pool of the AftermathFi platform was drained of $1.1 million USDC.
• October 2025: Typus Finance was precisely targeted due to oracle vulnerabilities and was forced to urgently suspend its smart contracts.

The multiple high-risk security incidents that erupted in just a few months, combined with the forced liquidation of Full Sail, indicate that even though the total locked value (TVL) on the Sui chain shows a growth trend, market concerns about the security of its DeFi ecosystem have not been completely alleviated.

This incident once again highlights the "centralization paradox" of oracles: DeFi protocols strive for decentralized governance at the application layer, but the key price data sources they rely on are often highly concentrated among a few external suppliers. The simultaneous outage of Switchboard on four public chains profoundly illustrates that behind the prosperity of cross-chain operations lies a shared, extremely fragile single trust assumption, making single points of failure a sword of Damocles hanging over many protocols.

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