Sui DeFi Protocol AlphaFi Winds Down After Oracle Debt Issue

The Sui DeFi protocol AlphaFi has begun winding down operations due to an oracle misconfiguration that created bad debt in its lending platform.

The issue stemmed from borrow positions backed by ALPHA token collateral, which became significantly under-collateralized, requiring additional support to maintain solvency.

The Sui Foundation's security team identified the problem and provided assistance to ensure AlphaFi remained solvent after the situation was resolved.

AlphaFi confirmed that all bad debt has been covered, and user funds remain safe. The protocol entered maintenance mode, stopping new deposits and loans while keeping withdrawals available.