DeFi Protocol Loopscale Hit by Exploit, Pauses Key Functions

Loopscale, a decentralized finance platform built on Solana, was forced to pause its lending operations after a major security breach led to losses of around $5.8 million.

The exploit, which occurred on April 26, involved a hacker draining roughly 5.7 million USDC and 1,200 SOL by executing a series of undercollateralized loans, according to co-founder Mary Gooneratne.

Following the breach, Loopscale quickly moved to partially reopen its platform, allowing users to repay loans, add collateral, and close loops, although other features like vault withdrawals remain suspended while investigations continue. Gooneratne confirmed the exploit only affected the platform’s USDC and SOL vaults, impacting around 12% of Loopscale’s total value locked (TVL).

The incident adds to a growing list of high-profile crypto exploits in 2025. Blockchain security firm PeckShield recently reported that over $1.6 billion has been stolen in the first quarter alone, with most losses tied to the $1.5 billion Bybit hack allegedly carried out by North Korea’s Lazarus Group.

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Launched publicly on April 10 after months of beta testing, Loopscale offers a unique approach to DeFi lending by matching borrowers and lenders directly through an order book model, rather than using pooled liquidity like traditional platforms such as Aave. The platform supports a range of specialized markets, including structured credit and undercollateralized loans.

Despite the setback, Loopscale has shown early momentum, drawing over 7,000 lenders and accumulating about $40 million in TVL. Its USDC and SOL lending vaults have been particularly popular, offering yields of over 5% and 10%, respectively. The platform also supports a wide array of token pairs, including JitoSOL and BONK, aiming to build a diverse lending ecosystem.

Alexander Stefanov