The DeFi protocol Term Finance has been hit by a governance attack, resulting in a loss of approximately $8.5 million.

BlockBeats News, August 24th. The DeFi fixed-rate lending protocol Term Finance's treasury was hit by a governance attack, with blockchain security firms PeckShield and CertiK estimating the loss to be around $8.5 million. The attacker reportedly transferred about 2843 ETH and $1.68 million USDC, converting the USDC to DAI.

The target of this attack was the Term Strategy Vaults based on the Yearn V3 architecture. However, Yearn stated that the vulnerability originated from a custom governance mechanism deployed outside the treasury of Term, and the standard Yearn treasury was not affected. It is worth noting that the Term treasury governance transactions originally had a 7-day timelock and allowed LP voting to veto, but these protective measures did not prevent this attack.

Prior to the attack, the Term treasury's Total Value Locked (TVL) was around $12.45 million, with this loss accounting for approximately 68% of its total TVL. Term Labs is currently investigating the specific attack vector.