Picture this: Loopscale, a shiny new decentralized finance gizmo on the Solana blockchain, barely out of the gate—two weeks, tops—before someone with dubious intentions strolls by and liberates a cool $5.8 million. Charming start, right?
On April 26, some clever miscreants found a chink in Loopscale’s armor, specifically in one of its lending markets. They managed to siphon off around 5.7 million USDC and 1,200 Solana tokens (SOL). Loopscale’s co-founder Mary Gooneratne broke the grim news and confirmed this little mishap eats up almost 12% of the protocol’s total stash. Not exactly what you want to hear when you just launched.
In classic damage-control fashion, Loopscale hit the pause button on lending operations faster than you can say “blockchain.” Then, like a good drama, they restarted only the basics—loan repayments, top-ups, loop closings—but left vault withdrawals simmering on the back burner. Investigations continue, but the bank vault remains under lock and key.
The culprit? A pricing hiccup in Loopscale’s fancy RateX-based collateral system, which kindly allowed the bad actors to rack up a series of under-collateralized loans. Analysis is still underway to figure out just how deep that rabbit hole goes and whether any of the treasure can be reclaimed.
If you’re wondering where Loopscale popped up from, it’s the offspring of Bridgesplit—an earlier venture that flirted with NFT yield products. Backed by Solana Labs, Coinbase Ventures, and pals, Loopscale hauled in $4.25 million from venture capitalists in 2021, presumably with the implied understanding that they’d keep funds safer than Fort Knox. Spoiler alert: not quite.
Unlike usual suspects such as Aave or Solend, which run pool-based lending, Loopscale bets on an order-book system to make lending terms more “predictable.” So far, predictability has taken a hit. Earlier this year, security guru team OShield gave Loopscale a thorough grilling, spotted some critical vulnerabilities, and Loopscale said they patched the major ones. Another audit by Sec3 is still in the works, because, hey, why not invite more experts to the party?
Alas, our dear Loopscale is just the latest chapter in the 2025 saga of DeFi disasters. This year’s headline acts include the Bybit $1.46 billion hack (apparently a gift from North Korea’s Lazarus Group), a $49 million stablecoin neobank heist at Infini, and a $7 million oracle caper at KiloEX. Crypto security? Let’s just say it’s been a rollercoaster with more drops than climbs.
According to blockchain watchdog PeckShield, the first quarter of 2025 saw hackers moonlighting with over $1.6 billion in stolen loot from exchanges and projects alike. The Bybit escapade alone made up the lion’s share of that pile. So Loopscale’s troubles are part of the same unruly mob, just trying to keep up.
Update: Loopscale has re-enabled loan repayments, top-ups, and loop closing. All other app functions (including Vault withdrawals) are still temporarily restricted while we investigate and ensure mitigation of this exploit.
The root cause of the exploit has been identified as an…
— Loopscale (@LoopscaleLabs) April 26, 2025
Following the $5.8 million “oops” moment, Loopscale gingerly switched back on some functions to keep the convoy moving while keeping Vault withdrawals on a tight leash. Importantly, the issue seems confined to their RateX-based collateral pricing, not the RateX token itself. Only the lucky depositors in the SOL and USDC Genesis vaults got the unwanted excitement.
The forensic sleuthing continues to unmask the who, the how, and hopefully the “how do we get our money back?” Loopscale’s in cahoots with law enforcement and security pros and promises a full post-mortem soon, complete with user withdrawal updates. Meanwhile, DeFi fans can only clutch their wallets a little tighter.
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2025-04-27 15:20