Solana’s DeFi Lending Protocol Loopscale Suffers $5.8M Exploit, Pauses Lending Operations

 Let’s explore how Solana DeFi protocol Loopscale lost $5.8 million in an exploit targeting RateX collateral pricing. Solana-based decentralized finance (DeFi) platform Loopscale has faced a massive cyberattack that has caused a loss of around $5.8 million. This exploitation represents around 12% of the protocol’s total value locked (TVL). This breach, which took place on April 26, 2025, impacted Solana price slightly and targeted the vulnerabilities in Loopscale’s collateral pricing mechanisms. This target was especially made on RateX-based pricing for its lending vaults, resulting in the platform temporarily pausing the key function in response to the hack of the Solana DeFi protocol to mitigate further risks. 

How the Exploit Occurred

The hacker of this Loopscale hack took advantage of an issue that was present in Loopscale’s pricing mechanism, which allowed them to withdraw funds by taking out a series of undercollateralized loans. The attack has resulted in the theft of around 1200 SOL and $5.7 million in USDC from the platform’s USDC and SOL vaults. Despite the past audits run, there were some vulnerabilities left undetected that resulted in this hack to become one of the crypto hacks of 2025. 

According to Mary Gooneratne, founder of Loopscale, the exploit was traced to the problem with the platform’s RateX-based collateral pricing system. However, the attack did not impact the borrowers or other Solana DeFi protocol participants. The Loopscale team on the X platform has announced this attack and wrote, “Today at 11:30AM EST, a manipulation of Loopscale’s RateX PT token pricing functions led to an exploit of ~5.7M USDC and 1,200 SOL from the Loopscale USDC and SOL Vaults. All Loopscale markets have been temporarily halted while our team investigates further.” 

Loopscale’s Response to the Attack

The Loopscale team took immediate action on this Loopscale hack and halted the operation that included withdrawal of any funds from affected vaults by sharing an update in one more post on X: “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.”

<blockquote class=”twitter-tweet”><p lang=”en” dir=”ltr”>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.<br><br>The root cause of the exploit has been identified as an… <a href=”https://t.co/Pk2pMx8UcK”>https://t.co/Pk2pMx8UcK</a></p>&mdash; Loopscale (@LoopscaleLabs) <a href=”https://twitter.com/LoopscaleLabs/status/1916230435291713786?ref_src=twsrc%5Etfw”>April 26, 2025</a></blockquote> <script async src=”https://platform.twitter.com/widgets.js” charset=”utf-8″></script>

The team has continued their investigations and works with law enforcement and security professionals to track the hackers and recover the stolen funds. This hack has shed light on the risks inherent in the DeFi protocols, particularly in relation to the complexity of the collateral pricing mechanism and the reliance on smart contracts. However, the team has made it clear on their commitment to user protection and investing in the incident along with aggressive security measures moving forward. 

The Broader DeFi Landscape in 2025 and SOL Price

SOL/USD chart, published on Tradingview, April 27, 2025

This Loopscale hack has become one of the major crypto hacks of 2025 and a trend of increased DeFi vulnerabilities this year, with over $1.6 billion in crypto being stolen from exchanges and on-chain smart contracts in the first quarter alone. DeFi platforms, in particular, have been frequent targets, such as the $1.46 billion break-in of ByBit in February 2025, allegedly done by the North Korean hacking group Lazarus. This Loopscale breach has not impacted the Solana price that much, but it is trading at a slight decrease as of April 27, 2025. Solana (SOL) is trading at  $148.36, reflecting a decrease of $0.91, or a 0.61% drop.

Security and Future Measures

Loopscale was launched in April 2025 after a six-month close beta and is distinguished by its unique order book-based lending model. The platform allows lenders and borrowers to directly interact with each other, offering fixed-rate and fixed-duration loans that help in mitigating the risk of volatility that is often associated with DeFi lending. Overall, the Solana price is not majorly affected, and this $5.8M hack has now become part of the crypto hacks of 2025. Following the breach, the platform has pledged to strengthen the security and to work on their unidentified vulnerabilities.