Yield loses $3.73M after extreme slippage swaps 3.84M GHO for $112K USDC
Yield, a DeFi vault protocol, incurred a $3.73 million loss after an extreme-slippage vault swap converted 3,840,651 stkGHO (≈ $3.83M) into only 112,000 USDC. PeckShield analysis shows the operation involved six different tokens and used Uniswap V4 and Bancor, with multiple internal ETH and ERC-20 transfers between pools, wrapped ETH contracts, and converters. The largest single ETH movement was 24.99 ETH (≈ $78k). Gas costs were negligible (~$1.03), indicating the loss stemmed from slippage and liquidity routing rather than fees. Users with funds in the affected vault may see reduced balances; the protocol has not announced corrective measures such as tightening slippage limits or changing trade-routing parameters. The incident highlights recurring DeFi risks: poor routing and liquidity checks can convert optimization into large losses. The report references similar past incidents — slippage losses at Yearn (~$1.4M pre-recovery), a Yearn V1 hack (~$300k), a $2.7M drainage from a Ribbon/Aevo contract, and Hyperliquid’s ~$4.9M loss from a POPCAT manipulation — illustrating growing frequency of slippage and market-manipulation events across DeFi. Primary keywords: Yield, slippage, GHO, USDC, Uniswap, Bancor, DeFi risk.
Bearish
This event is bearish for short-term market sentiment and confidence in DeFi vault optimization. A $3.73M loss caused by extreme slippage signals execution, routing and liquidity-check weaknesses in Yield’s vault strategy. Traders may withdraw funds from similar vaults, increasing outflows and temporary selling pressure on tokens involved (GHO, stkGHO and liquidity pool assets). Comparable past incidents (Yearn slippage, Hyperliquid POPCAT) triggered elevated volatility, reduced TVL in affected protocols, and heightened risk premia for vault products. In the near term expect: increased withdrawals from optimized vaults, lower bidding for risky vault yields, and possible price pressure on GHO-related liquidity. In the medium-to-long term the market response may be neutral-to-moderating: protocols often tighten slippage limits, update routing and add liquidity checks after such losses, restoring some confidence. However, repeated incidents raise structural concerns that can keep DeFi risk premiums elevated and slow capital return to complex vault strategies. Overall: immediate bearish impact on sentiment and liquidity for affected tokens and vault strategies; possible stabilization if Yield implements robust fixes and industry adopts stronger safeguards.