What Is AlphaFi? Sui Yield Aggregator, Now Winding Down
AlphaFi ran Sui yield vaults, the ALPHA token, stSUI and AlphaLend. An ALPHA oracle error created bad debt and it is winding down since 25 September 2026.
AlphaFi is a Sui DeFi protocol that ran auto-compounding yield vaults, the ALPHA token, the stSUI liquid staking token and a lending market called AlphaLend, and it has been winding down since 25 September 2026, when an ALPHA oracle misconfiguration left bad debt in AlphaLend. Withdrawals stayed open, but new deposits and borrows stopped. This explainer covers what each AlphaFi product did, what happened in September, what the numbers look like on 31 October 2026, and what the episode teaches about yield aggregators.
What happened to AlphaFi in September 2026
On 25 September 2026 the Sui Network account posted that the Sui Security Team had identified a misconfiguration of AlphaFi's ALPHA oracle, which had created bad debt. The post said AlphaFi was winding down, that the Sui Foundation would provide assistance "to ensure that the protocol is wholly solvent", and that no user funds were impacted. It told borrowers they could unwind and withdraw from AlphaLend, and told users of the Slush wallet that they could withdraw yield and principal from the USDC, SUI, WAL and DEEP Strategies with no wait.
Reports the next day added detail. PANews said the bad debt came from AlphaLend borrow positions that used ALPHA as collateral and became badly under-collateralized, that the protocol was in maintenance mode with withdrawals open and no new deposits or borrows, that the ALPHA vault had ceased operations with its lock-up removed, and that AlphaFi would leave the Sui ecosystem once the last user had withdrawn. No public figure for the size of the bad debt appeared in the sources we checked.
DefiLlama shows the effect. AlphaFi Lending held about $66.7 million on 22 September 2026 and about $2.0 million on 31 October. The aggregator vaults fell from about $20.4 million to about $1.9 million over the same period, and stSUI from about $4.1 million to about $0.7 million.
AlphaFi's products at a glance
| Product | What it did | Peak TVL (DefiLlama) | TVL on 31 Oct 2026 | Status after 25 Sep 2026 |
|---|---|---|---|---|
| AlphaFi vaults (aggregator) | Auto-compounding and auto-rebalancing vaults on Sui DEXs and lenders | About $80.2M, 7 Jan 2025 | About $1.9M | Withdrawals only |
| AlphaLend (AlphaFi Lending) | Over-collateralized money market | About $74.0M, 21 Sep 2026 | About $2.0M | Withdrawals and repayments only |
| stSUI | Liquid staking token with instant unstaking | About $50.3M, 28 Jul 2025 | About $0.7M | Not mentioned in the 25 September post |
| ALPHA Vault | Stake ALPHA to earn SUI from protocol fees | Not tracked separately | Not tracked separately | Ceased operations, lock-up removed (per PANews) |
How AlphaFi's vaults worked
DefiLlama began tracking AlphaFi's vaults in July 2024, and by January 2025 they held about $80 million, its all-time peak. AlphaFi called its vaults Strategies. Each vault took one asset or one pair, put it into an underlying protocol and grew the position. AlphaFi's docs list four vault types: concentrated liquidity vaults on Cetus, Bluefin and Momentum; lending vaults on NAVI, Bucket and AlphaLend; liquid staking vaults for stSUI and vSUI; and stablecoin vaults for USDC, USDT and USDY.
The cycle is the classic aggregator loop described in our yield aggregator explainer. You deposited and received a receipt token. The vault claimed reward tokens, typically every two hours according to the docs, swapped them into the vault's asset and reinvested them, so each receipt token was worth more over time. Concentrated liquidity vaults also reset their price range when the market moved past a trigger, which keeps the position earning fees but locks in any impermanent loss at each reset. AlphaFi's own risk page says as much.
Fees were simple. AlphaFi charged a 20% performance fee on yield at each compound, with no deposit, withdrawal or management fee, and the APY shown in the app was already net of that fee. According to the fee-distribution page, half of the performance fee went to ALPHA Vault stakers as SUI rewards, 20% to a reserve, 5% to ALPHA-SUI liquidity and 25% to operations.
The ALPHA token
ALPHA had a fixed maximum supply of 10 million tokens. AlphaFi's tokenomics page allocates 60% to the community through liquidity-mining emissions, 25% to the team (300-day cliff, then linear vesting), 10% to operations and marketing and 5% to liquidity. Community emissions started at 30,000 ALPHA a day and halved every 100 days until day 1,000.
Holders could stake ALPHA in the ALPHA Vault to earn weekly SUI rewards funded by protocol fees, with a 35-day wait to unstake according to the current docs. ALPHA was also emitted as a reward in some vaults and lending markets. That last point matters for the September events: when a protocol's own token is accepted as loan collateral, a bad price feed for that token lets borrowers take out more than the collateral can cover. Our guide to price oracles explains how oracle errors turn into bad debt.
stSUI and the stSUI Standard
stSUI is AlphaFi's liquid staking token. You stake SUI, receive stSUI, and the exchange rate rises as validator rewards come in each epoch. Its main feature was instant unstaking: AlphaFi kept a liquidity buffer so you could redeem stSUI for SUI in one transaction, with no epoch wait. The docs list a 6% performance fee on staking rewards and a 0.01% redemption fee, and a MoveBit audit dated December 2024.
AlphaFi also published stSUI as a standard that other teams could use to launch their own LSTs, according to DefiLlama's description. stSUI peaked at about $50.3 million in July 2025. The Sui Network's 25 September post did not mention stSUI, so check AlphaFi's official channels for its current redemption terms before relying on instant unstaking. For other Sui LSTs, see our Sui liquid staking comparison and Lido alternatives on Sui.
AlphaLend
AlphaLend, renamed AlphaFi Lend in the current docs, was a standard over-collateralized money market. You supplied assets to earn interest or posted them as collateral to borrow, with positions held as NFTs. The docs list 85% LTV for stablecoins, SUI and stSUI, 80% for wrapped BTC and 45% to 60% for newer or volatile assets, with liquidation thresholds about five points higher. DefiLlama's AlphaFi Lending series starts in June 2026 and peaked at about $74.0 million on 21 September 2026, four days before the wind-down was announced. On 31 October 2026 only about $0.24 million was still borrowed. Our Sui lending comparison covers the larger lenders.
If you still hold AlphaFi positions
The Sui Network post gave the route out as of 25 September 2026: repay any borrow, then withdraw from AlphaLend; Slush users could withdraw from Strategies with no waiting period, and anyone with a pending withdrawal request was told to cancel it and withdraw again to receive funds instantly. Exits from concentrated liquidity vaults return both tokens of the pair at current prices, so the amount may differ from what you deposited. Use only official AlphaFi or Sui links: wind-downs attract fake "claim" sites, a pattern covered in our crypto scams guide.
What AlphaFi's wind-down shows about aggregators
- An aggregator inherits every risk of the protocols under it, and AlphaFi had added its own lender as one of those layers. A problem in AlphaLend reached the vault product too.
- Accepting a protocol's own token as collateral ties the lender's solvency to that token's price feed. That feed was the point of failure here.
- TVL can disappear in days. AlphaFi Lending lost about 90% of its TVL within a week of the announcement, per DefiLlama.
- Outside support is not guaranteed. The Sui Foundation chose to help in this case; that does not mean it will for other protocols.
Our protocol safety checklist lists what to look at before depositing anywhere. For the Sui vaults still operating, see Yearn alternatives on Sui and best yield optimizers on Sui, and the Sui TVL breakdown for where money sits across the chain.
Where JewelSwap fits
JewelSwap's Sui product closest to AlphaFi's vaults is its set of auto-compounded leveraged farms built on Scallop, boosted by a shared veSCA position funded by JWLSCA stakers' locked SCA. They borrow on your behalf, so they carry liquidation risk that AlphaFi's unleveraged vaults did not. The Scallop farm guide explains how they work.
Frequently asked questions
What is AlphaFi?
AlphaFi is a Sui DeFi protocol that offered auto-compounding yield vaults, the ALPHA token, the stSUI liquid staking token and the AlphaLend money market. It has been winding down since 25 September 2026.
Why is AlphaFi shutting down?
The Sui Security Team found a misconfiguration of AlphaFi's ALPHA oracle that created bad debt in AlphaLend, according to the Sui Network's post on 25 September 2026. AlphaFi then announced an orderly wind-down, and the Sui Foundation said it would help keep the protocol solvent.
Can I still withdraw from AlphaFi?
Withdrawals were open as of the 25 September 2026 announcement, while new deposits and borrows were stopped. Borrowers need to repay before withdrawing collateral from AlphaLend. Check AlphaFi's official channels for the current state.
What is stSUI?
stSUI is AlphaFi's liquid staking token for SUI. It rises in value against SUI as staking rewards accrue and was designed for instant unstaking from a liquidity buffer, with a 6% fee on rewards and a 0.01% redemption fee, per AlphaFi's docs.
What was the ALPHA token used for?
ALPHA, capped at 10 million tokens, was AlphaFi's reward and governance token. Holders could stake it in the ALPHA Vault for weekly SUI rewards from protocol fees. That vault ceased operations as part of the wind-down, according to PANews.
Educational only, not financial advice. Figures from DefiLlama; product details from AlphaFi's docs, the Sui Network's 25 September 2026 post and news reports, all checked 31 October 2026. DeFi carries smart-contract, oracle and market risk, including total loss.
