Solana-based decentralized finance platform Loopscale has temporarily halted its lending operations following a security breach that resulted in the loss of approximately $5.8 million. On April 26, an attacker exploited a series of undercollateralized loans to withdraw about 5.7 million USDC stablecoins and 1,200 SOL tokens, according to statements from Loopscale’s co-founder, Mary Gooneratne. This theft represents around 12% of the protocol’s total value locked, which is estimated at roughly $40 million.
The exploit specifically targeted Loopscale’s USDC and SOL vaults, with other assets remaining unaffected. In response, the team has paused repayment functions to prevent unexpected liquidations and is actively investigating the incident to recover funds and protect users.
Launched publicly on April 10 after a six-month closed beta, Loopscale offers a unique approach to DeFi lending by using an order book model that directly matches lenders and borrowers, rather than pooling deposits. This structure supports fixed-rate, fixed-duration loans and specialized lending markets such as structured credit and undercollateralized lending. Loopscale’s USDC and SOL vaults provide attractive yields, with annual percentage rates exceeding 5% and 10%, respectively.
Despite the recent setback, Loopscale’s team is fully mobilized to restore services and ensure the safety of its community. This incident underscores the ongoing security challenges faced by the DeFi sector, which has seen more than $1.6 billion stolen from exchanges and smart contracts in the first quarter of 2025 alone.
With over 7,000 lenders and a growing presence in the Solana ecosystem, Loopscale remains a notable player in decentralized finance, continuing to innovate while addressing the risks inherent in the space.
