- Loopscale halted lending after a $5.8M exploit, impacting USDC and SOL vaults and freezing some app functions while investigations continue.
- The protocol had just launched on April 10, offering high-yield lending markets with over 7,000 lenders and $40M TVL before the attack.
- The hack adds to a rough year for DeFi security, with over $1.6B stolen in Q1 2025, highlighting ongoing risks in the space.
Solana’s DeFi space took another hit this week. Loopscale, a relatively new lending protocol, has paused parts of its platform after getting drained for about $5.8 million in an exploit.
The Attack and Aftermath
On April 26, hackers swooped in and drained roughly 5.7 million USDC and 1,200 SOL by pulling off a series of undercollateralized loans, according to Loopscale co-founder Mary Gooneratne.
Loopscale quickly jumped into action:
- Loan repayments, top-ups, and loop closing features have been re-enabled,
- Vault withdrawals and other key functions? Still frozen for now.
The hack mostly impacted Loopscale’s USDC and SOL vaults, wiping out around 12% of the platform’s total value locked (TVL).
“Our team is fully mobilized to investigate, recover funds, and ensure users are protected,” Gooneratne said in a post on X.
Bigger Picture: DeFi’s Security Struggles Continue
This Loopscale breach isn’t happening in a vacuum. PeckShield reported that just in Q1 2025, more than $1.6 billion in crypto was stolen — and a big chunk of that ($1.5B!) came from the ByBit hack linked to Lazarus Group out of North Korea.
DeFi still feels like the Wild West sometimes?
What Makes Loopscale Different
Launched on April 10 after a six-month beta, Loopscale tries to do DeFi lending a little differently:
- It matches lenders and borrowers directly instead of pooling liquidity like Aave does.
- It supports structured credit markets, receivables financing, and even undercollateralized lending — which, yeah, sounds kinda risky but also interesting.
The platform boasts some juicy numbers, too:
- Over 7,000 lenders joined in just a few weeks,
- Around $40 million TVL before the hack,
- Main vault APRs pushing 5%+ for USDC and 10%+ for SOL.
They also offered exotic pairs like JitoSOL and BONK for adventurous yield seekers
Loopscale was riding some serious momentum… until the exploit hit. Now, the next few days will be critical in seeing whether they can recover — and more importantly, regain trust.
