Thomas Daniels
Solana’s Loopscale Suspends Lending Markets Following $5.8 Million Exploit
Decentralized finance (DeFi) platform Loopscale has temporarily suspended its lending operations after an exploit resulted in the loss of approximately $5.8 million. The Solana-based protocol confirmed that loan repayments have resumed, although several core functionalities remain disabled.
According to a statement by Loopscale co-founder Mary Gooneratne on X (formerly Twitter), the breach occurred on April 26, when an attacker executed a sequence of undercollateralized loans. This allowed them to siphon roughly 5.7 million USDC and 1,200 Solana (SOL) tokens from the platform.
Following the incident, Loopscale reactivated loan repayments, top-ups, and loop closing features. However, other critical operations, including vault withdrawals, are still temporarily restricted as the team continues its investigation. “Our team is fully mobilized to investigate, recover funds, and ensure users are protected,” Gooneratne affirmed.
The losses impacted only Loopscale’s USDC and SOL vaults, representing around 12% of the platform’s total value locked (TVL), which currently stands at approximately $40 million. Loopscale has also amassed a community of over 7,000 lenders since its public launch earlier this month.
The exploit comes amid a broader surge in crypto-related attacks. In its April report, blockchain security firm PeckShield revealed that more than $1.6 billion was stolen from exchanges and smart contracts during the first quarter of 2025, with over 90% attributed to a $1.5 billion attack on centralized exchange ByBit by North Korea’s Lazarus Group.
A New Model in DeFi Lending
Loopscale, which exited a six-month closed beta on April 10, aims to differentiate itself in the DeFi lending space through a direct matching model between lenders and borrowers. Unlike established platforms like Aave, which aggregate liquidity into pools, Loopscale employs an order book structure to optimize capital efficiency.
The platform also supports specialized markets, including structured credit, receivables financing, and undercollateralized lending. Its primary USDC and SOL vaults currently offer annual percentage rates (APRs) exceeding 5% and 10%, respectively. Additionally, Loopscale accommodates lending markets for niche tokens such as JitoSOL and BONK, and facilitates complex looping strategies across more than 40 token pairs.
As the investigation into the exploit progresses, users await further updates on the restoration of full platform functionality and potential recovery efforts.
