Full Sail, a decentralized finance (DeFi) protocol built on the Sui blockchain, is shutting down after a security incident involving oracle provider Switchboard led to losses for users.

The protocol announced the wind-down on X on Tuesday Full Sail post, immediately disabling new deposits and liquidity provider (LP) reward claims. Regular pools will shift to withdrawal-only mode after final security checks are completed, with compensating users identified as the protocol's top priority.

The decision follows a security incident last week that affected Full Sail's automated vaults after a suspected compromise of Switchboard's oracle infrastructure. Oracles are third-party services that supply price and other external data to smart contracts, and compromise of an oracle can allow attackers to manipulate the prices DeFi protocols rely on. Oracle failures and price-feed manipulation have been a recurring source of DeFi losses across multiple ecosystems, as multiple protocols frequently depend on the same upstream providers — meaning a single compromised oracle can affect several platforms at once, as seen in this case.

Full Sail first disclosed the incident on Saturday Full Sail disclosure, confirming a loss of funds and pausing deposits and withdrawals while it investigated. Switchboard said in an X post the same day Switchboard statement that it was investigating a potential compromise of its Move-based implementations and had halted its network on Aptos, Sui, IOTA and Movement. Switchboard is a cross-chain oracle provider operating across multiple Move-language blockchains as well as Solana, making the incident relevant beyond Sui alone.

Full Sail later said an attacker removed approximately $91,000 from three of its vaults. Separately, Virtue, a stablecoin lending protocol based on IOTA (IOTA), reported roughly $455,000 in losses and said the backing of its VUSD stablecoin had been impaired Virtue statement.

Full Sail said it will use its remaining protocol-owned liquidity to compensate users, and that the team will cover any shortfall so that community depositors are repaid first. The protocol expects to publish withdrawal and claim instructions within the coming days. Users of other Switchboard-dependent protocols across the affected networks will be watching for the results of Switchboard's investigation and the eventual restoration of its feeds.

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