Update (April 26 at 8:57 PM UTC): This article has been revised to incorporate news from Loopscale.
Solana decentralized finance (DeFi) framework Loopscale temporarily suspended its lending operations after experiencing an approximate $5.8 million breach.
On April 26, a cybercriminal extracted roughly 5.7 million USDC (USDC) and 1200 Solana (SOL) from the lending system after acquiring a “series of undercollateralized loans,” according to Loopscale co-founder Mary Gooneratne stated in a post on X.
Loopscale has since “reactivated loan repayments, top-ups, and loop closures,” but “[a]ll other application functionalities (including Vault withdrawals) remain temporarily limited as we explore and ensure remediation against this breach,” Loopscale mentioned in an April 26 post on X.
The breach solely affected Loopscale’s USDC and SOL vaults, and the losses account for about 12% of Loopscale’s total value locked (TVL), Gooneratne further noted.
“Our team is fully engaged to investigate, recover funds, and safeguard users,” Gooneratne remarked.
During the first quarter of 2025, hackers appropriated over $1.6 billion in cryptocurrency from exchanges and blockchain smart contracts, as reported by blockchain security firm PeckShield in an April report.
More than 90% of those thefts are linked to a $1.5 billion assault on ByBit, a centralized cryptocurrency exchange, committed by the North Korean hacking group Lazarus Group.
Related: Crypto hacks exceed $1.6B in Q1 2025 — PeckShield
Distinct DeFi lending structure
Launched on April 10 following a six-month closed beta phase, Loopscale is a DeFi lending protocol intended to improve capital efficiency by directly connecting lenders and borrowers.
It also facilitates specialized lending markets, such as “structured credit, receivables financing, and undercollateralized lending,” Loopscale mentioned in an announcement shared with Cointelegraph in April.
Loopscale’s order book model sets it apart from DeFi lending counterparts like Aave that consolidate cryptocurrency deposits into liquidity pools.
Loopscale’s primary USDC and SOL vaults yield APRs surpassing 5% and 10%, respectively. It also accommodates lending marketplaces for tokens like JitoSOL and BONK (BONK) and looping techniques for over 40 distinct token pairs.
The DeFi protocol holds around $40 million in TVL and has attracted more than 7,000 lenders, as noted by researcher OurNetwork.
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