Loopscale Lending Halted After $5.8 Million Exploit
The Solana decentralized finance (DeFi) landscape has experienced another security breach, with the lending protocol Loopscale falling victim to an exploit that siphoned approximately $5.8 million. The incident, which occurred on April 26, 2025, involved a hacker taking out a series of undercollateralized loans, ultimately draining 5.7 million USDC and 1200 SOL from the protocol’s vaults.
Loopscale co-founder Mary Gooneratne confirmed the exploit in an X post, stating that the incident only impacted the platform’s USDC and SOL vaults. These losses represent roughly 12% of Loopscale‘s total value locked (TVL), highlighting the severity of the attack.
In response to the exploit, Loopscale has temporarily halted its lending markets to prevent further damage. The protocol is actively working to resume repayment functionality as soon as possible, aiming to mitigate unforeseen liquidations. Gooneratne emphasized that the team is fully committed to investigating the incident, recovering the stolen funds, and ensuring the protection of user assets.
A Growing Trend in DeFi
This incident underscores the ongoing vulnerability of the DeFi space to security breaches. According to blockchain security firm PeckShield, hackers stole over $1.6 billion worth of cryptocurrency from exchanges and on-chain smart contracts during the first quarter of 2025. A significant portion of these losses, over 90%, can be attributed to a $1.5 billion attack on centralized cryptocurrency exchange ByBit, carried out by the notorious North Korean hacking group Lazarus Group.
Loopscale‘s Unique Approach
Launched in April 2025, Loopscale distinguishes itself from traditional DeFi lending platforms like Aave through its order book model. This approach directly matches lenders and borrowers, aiming to enhance capital efficiency and foster innovation in the DeFi space.
Loopscale boasts specialized lending markets catering to niche areas like structured credit, receivables financing, and undercollateralized lending. It also offers lending markets for tokens like JitoSOL and BONK, along with looping strategies for over 40 different token pairs. The protocol’s main USDC and SOL vaults provide attractive APRs exceeding 5% and 10%, respectively, attracting over 7,000 lenders and building a TVL of approximately $40 million.
While the recent exploit serves as a stark reminder of the inherent risks associated with DeFi, Loopscale remains committed to addressing the security challenges and ensuring the long-term stability of its lending ecosystem. The platform’s transparent approach and swift response to the incident demonstrate its commitment to user safety and the responsible growth of DeFi.
