Loopscale, a decentralized finance (DeFi) protocol operating on the Solana blockchain, was targeted by hackers over the weekend, resulting in a significant loss of $5.8 million. The exploit occurred just weeks after the platform’s official launch, exposing vulnerabilities in its lending market.
On April 26, attackers took advantage of a flaw in one of Loopscale’s lending markets, stealing around 5.7 million USDC and 1,200 Solana (SOL) tokens. This exploit represents nearly 12% of the total value locked (TVL) in the protocol, according to Mary Gooneratne, Loopscale’s co-founder.
In response to the attack, Loopscale paused its lending operations but later resumed limited services, including loan repayments, top-ups, and loop closings. However, withdrawals from vaults and other essential features remain suspended as the team works to assess the situation.
The breach was traced back to a specific issue with the pricing mechanism of RateX-based collateral. This flaw enabled attackers to secure undercollateralized loans, which were central to the exploit. A full investigation is ongoing, as the protocol examines the extent of the damage and potential recovery options.
Loopscale, launched on April 10, is the successor to Bridgesplit, a project previously focused on NFT-based yield products. Backed by prominent investors such as Solana Labs and Coinbase Ventures, the protocol had raised $4.25 million in funding in 2021. Unlike traditional lending platforms like Aave or Solend, Loopscale operates on an order book-based system, offering more predictable terms for lenders and borrowers.
The protocol had been audited earlier this year by security firm OShield, which flagged several critical vulnerabilities. While Loopscale claimed to have addressed these issues, a separate audit by Sec3 is still in progress.
Despite these security efforts, the exploit highlights a growing trend of attacks within the DeFi sector. In 2025 alone, several high-profile breaches have occurred, including the $1.46 billion hack of Bybit, allegedly linked to North Korea’s Lazarus Group. Other notable incidents include a $49 million loss at Infini, a stablecoin neobank, and a $7 million hack targeting KiloEX, a decentralized exchange.
Blockchain security firm PeckShield reported that hackers stole over $1.6 billion from crypto exchanges and on-chain projects in the first quarter of 2025, with the Bybit breach accounting for the largest portion.
As Loopscale works to identify the perpetrators and recover the stolen assets, the team is collaborating with law enforcement and security experts. The platform has assured users that further updates, including a technical breakdown and details on withdrawal processes, will be shared shortly.
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