In response to the August 23, 2026 governance exploit of Term USDC and ETH Vaults, Term is preparing the first distribution to eligible depositors in the affected USDC and ETH vaults.
This first distribution is targeted for October 2, 2026. A second distribution is planned for December 15, 2026, following additional USDC and ETH Repo Token maturities and redemptions. Further distributions may be made if additional funds become available.
The first distribution combines two separate components:
For the USDC depositor loss pool, $987,095.52 has been recovered against $1,638,604.34 in recorded losses. This amount excludes Repo Token principal and interest, which are separate from and additional to recovered stolen funds and represent proceeds from fixed-rate loans rescued from the affected vaults.
Importantly, the underlying loans represented by those Repo Tokens were not affected by the incident, and Term’s core lending contracts continue to operate. As a result, Repo Tokens representing fixed-rate loans held by the affected vaults continue to generate principal and interest according to their terms. Assuming the remaining Repo Tokens redeem in full at maturity, total recovery is currently estimated at 87.8% for USDC Meta Vault depositors and 64.1% for RockawayX Tori depositors, reflecting their different Repo Token exposure. Actual recoveries may be lower if any Repo Token does not perform.
The first distribution includes Repo Token proceeds received as of September 30, 2026, with proceeds from remaining Repo Tokens expected to be included in the distribution planned for December 15, 2026.
Recovery efforts for the ETH depositor pool remain ongoing, but no stolen ETH has been recovered to date. Accordingly, distributions to ETH vault depositors currently consist solely of proceeds from ETH Repo Tokens rescued from the affected vaults.
Eligibility for claims is determined by economic ownership at each vault's pre-incident snapshot, including positions held through supported protocols and wrappers. Each depositor's share is then calculated from holdings at the pre-incident snapshot for ETH vaults, and at the September 10, 2026 reconciliation block for USDC vaults, which excludes residual value redeemed since the incident. Block numbers are set out in the FAQ below.
Eligible smaller allocations will be distributed through Merkl:
Claims of $20,000 USDC or more or 1 WETH or more will be transferred directly to the applicable snapshot address. These allocations will not appear in the public Merkl campaigns.
Term will publish the official claim links and instructions through Term’s X.com account (@term_labs) and on Term’s blog (https://www.term.finance/blog) once the campaigns are funded and claimable.
No claim action is required today. Term will not send claim links by direct message and will never ask for a seed phrase or private key.
Thank you for your patience through the reconciliation and distribution process.
1. Was Term’s direct lending protocol affected by the vault incident?
The exploit targeted the governance of the affected vaults.
Term’s direct fixed-rate borrowing and lending contracts were not compromised. The core protocol remains open, and their supply, repayment and liquidation mechanisms continue to operate.
2. Who is eligible?
Eligibility is based on economic ownership at the block immediately preceding each vault’s exploit transaction:
This includes direct holdings and positions held through supported protocols and wrappers, including Pendle and Curve, at those blocks.
Your share of recovered funds is then calculated:
ETH vaults: by holdings at the pre-incident block above. No redemptions occurred after the incident, so those balances still reflect what was lost.
USDC vaults: by holdings at the reconciliation block, Ethereum block 25,948,151 (10 September 2026, 16:21:47 UTC).
3. How much will I receive?
Your distribution consists of:
4. When will I receive it?
The first distribution is targeted for October 2, 2026. The second is planned for December 15, 2026.
These dates are subject to completing the necessary reconciliation, funding, and operational steps. We will confirm when each campaign is claimable.
5. How will I receive it?
Payments are determined separately for each asset:
Direct-transfer allocations are excluded from the Merkl campaigns to prevent duplicate payments.
6. Do I need to do anything now?
No. Term will announce when claims are available.
Official claim links will be published only through @term_labs and the Term Finance blog.
Term will not send claim links or payment instructions by direct message. Term will never ask for a seed phrase or private key.
7. Why are there two distributions?
Recovered assets and proceeds from earlier Repo Token maturities can be distributed first. Other Repo Tokens mature later.
The December distribution is intended to distribute the remaining redemption proceeds.
8. Will there be additional distributions after December?
Additional distributions will depend on whether further assets are recoverable. Term Finance and its counsel are working with law enforcement authorities to investigate this matter, and we remain committed to assisting the government’s efforts. We cannot comment further or disclose details on any confidential government investigation.
9. Why might my address be absent from the Merkl campaign?
An address may be excluded because:
USDC and WETH allocations are assessed separately.
10. What should I do if my allocation appears incorrect?
Open a support ticket through Term’s official Discord and provide your wallet address, the relevant vault or position, and supporting transaction hashes. We will review the position against the snapshot and reconciliation records. Term will not contact you first by direct message about a claim.
11. Where will the official claim links be published?
We will publish official claim links through Term’s official X account, @term_labs, and Term’s blog once claims are available. Verify links through those channels before connecting your wallet. Term will never ask for your seed phrase or private key.
12. How long will I be able to claim?
The first campaign is expected to be claimable from 00:00:00 UTC on October 2, 2026 until 23:59:59 UTC on December 1, 2026. Amounts not claimed by that time will return to the recovery pool and be applied to subsequent distributions to remaining eligible depositors.
The claim window and terms for the second distribution will be confirmed ahead of December 15, 2026.
