Loopscale Protocol Halts Lending Markets After $5.8M Exploit

Solana decentralized finance (DeFi) protocol Loopscale has temporarily halted its lending markets after suffering an approximately $5.8 million exploit.

Solana decentralized finance (DeFi) lending protocol Loopscale has temporarily halted its lending markets after suffering an exploit for an undisclosed amount.

Announcing the exploit on April 26, Loopscale said that a hacker took out “a series of undercollateralized loans” and used them to siphon approximately 5.7 million USDC (USDC) and 1200 Solana (SOL) from the protocol.

Only Loopscale’s USDC and SOL vaults were affected by the exploit and the losses represent around 12% of Loopscale’s total value locked (TVL), according to Loopscale co-founder Mary Gooneratne.

Loopscale is “working to resume repayment functionality as soon as possible to mitigate unforeseen liquidations,” its said in an X post.

“Our team is fully mobilized to investigate, recover funds, and ensure users are protected,” Gooneratne said.

In the first quarter of 2025, hackers stole more than $1.6 billion worth of crypto from exchanges and on-chain smart contracts, blockchain security firm PeckShield said in an April report.

Over 90% of those losses are attributable to a $1.5 billion attack on ByBit, a centralized cryptocurrency exchange, by North Korean hacking outfit Lazarus Group.

Related: Crypto hacks top $1.6B in Q1 2025 — PeckShield

Unique DeFi lending model

Launched on April 10 after a six-month closed beta, Loopscale is a DeFi lending protocol designed to enhance capital efficiency by directly matching lenders and borrowers.

It also supports specialized lending markets, such as “structured credit, receivables financing, and undercollateralized lending,” Loopscale said in an April announcement shared with Cointelegraph.

Loopscale’s order book model distinguishes it from DeFi lending peers such as Aave that aggregate cryptocurrency deposits into liquidity pools.

Loopscale’s main USDC and SOL vaults yield APRs exceeding 5% and 10%, respectively. It also supports lending markets for tokens such as JitoSOL and BONK (BONK) and looping strategies for upwards of 40 different token pairs.

The DeFi protocol has approximately $40 million in TVL and has attracted upwards of 7,000 lenders, according to researcher OurNetwork.

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News data source: kdj.com

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