DeFi Platform Loopscale Loses $5.8 Million in Exploit, Pauses Lending

Key Takeaways

• The exploit was brought on by a flaw within the pricing mechanism for RateX-based collateral.
• Loopscale has not disclosed whether or not person funds might be reimbursed or if insurance coverage mechanisms might be activated.

Decentralized finance platform Loopscale confirmed on Friday that it had suffered a safety breach ensuing within the lack of roughly $5.8 million, affecting its USDC and SOL vaults. The quantity represents round 12% of the whole worth locked (TVL) on the platform.

The Solana-based protocol stated in an announcement that the exploit was brought on by a flaw within the pricing mechanism for RateX-based collateral. “The basis reason for the exploit has been recognized as an remoted difficulty with Loopscale’s pricing of RateX-based collateral,” the workforce posted on X. An investigation is underway to find out how the breach occurred and whether or not the stolen funds may be recovered.

“Our workforce is absolutely mobilized to analyze, recuperate funds, and guarantee customers are protected,” co-founder Mary Gooneratne wrote on social media, assuring customers that safeguarding belongings stays the workforce’s high precedence.

Loopscale, beforehand often called Bridgesplit, first entered the decentralized finance house after elevating $4.25 million in 2021. Buyers included main business gamers similar to Solana Labs and Coinbase Ventures. Initially specializing in NFT-based yield merchandise, the challenge later shifted towards a lending mannequin distinct from conventional pool-based platforms like Aave or Solend. 

Safety had been a recognized concern even earlier than the launch. Earlier this 12 months, a safety audit carried out by blockchain auditing agency OShield uncovered a number of vital vulnerabilities. In keeping with Loopscale’s public documentation, these points have been addressed forward of the platform’s launch in April. A second audit by Sec3 is reportedly ongoing.

Loopscale has not disclosed whether or not person funds might be reimbursed or if insurance coverage mechanisms might be activated. In the course of the launch time, Loopscale was marketed as a stand-alone protocol because it leveraged an order guide structure to execute loans by straight matching lenders and debtors with mounted charges, whereas others use a pool-based mannequin.

The most recent improvement comes amid a PeckShield report which revealed that  over $1.63 billion in crypto was stolen through the first quarter of 2025.