- The Hacker took approximately 5.7 million USDC and 1,200 SOL through a series of undercollateralized loans, impacting about 12% of Loopscale’s total value locked.
- Launched in April 2025 after a six-month beta, Loopscale uses a direct lending model that distinguishes it from pool-based DeFi protocols like Aave.
Loopscale, a decentralized finance protocol on Solana, has temporarily suspended its lending markets following a security breach that resulted in approximately $5.8 million in stolen funds. The attack, which occurred on April 26, targeted the protocol’s USDC and SOL vaults. According to co-founder Mary Gooneratne, the hacker extracted roughly 5.7 million USDC and 1,200 SOL by executing “a series of undercollateralized loans.”
Gooneratne said on X that the compromised assets represent approximately 12% of the protocol’s total value locked (TVL). Loopscale has confirmed that only the USDC and SOL vaults were affected by the exploit, while other assets remained secure. The protocol stated it is “working to resume repayment functionality as soon as possible to mitigate unforeseen liquidations.”
“Our team is fully mobilized to investigate, recover funds, and ensure users are protected,” Gooneratne announced following the incident. The exploit comes at a time when cryptocurrency hacks are increasing in frequency and scale. According to blockchain security firm PeckShield, more than $1.6 billion in crypto assets were stolen in the first quarter of 2025 alone, with over 90% attributed to a $1.5 billion attack on ByBit by North Korean Hacking group Lazarus.
Innovative Lending Protocol
Loopscale had only recently launched its public platform on April 10, following a six-month closed beta period. The protocol was designed to enhance capital efficiency through its unique approach of directly matching lenders with borrowers, rather than relying on pooled liquidity models.
The platform supports specialized lending markets including “structured credit, receivables financing, and undercollateralized lending,” according to an April announcement shared with Cointelegraph. This order book model differentiates Loopscale from competitors like Aave that use aggregated cryptocurrency deposits in liquidity pools.
Market Position and Growth
Prior to the exploit, Loopscale was gaining significant traction in the DeFi ecosystem. The protocol’s main vaults offered attractive yields, with USDC and SOL vaults delivering APRs exceeding 5% and 10% respectively. Beyond these primary markets, Loopscale supported lending for various tokens including JitoSOL and BONK, while offering looping strategies for more than 40 different token pairs.
According to researcher OurNetwork, as reported by Gooneratne, the protocol had accumulated approximately $40 million in total value locked before the attack and had attracted more than 7,000 lenders. This exploit represents a substantial setback for the emerging platform as it works to secure its system and restore user confidence.
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