Loopscale, a lending market constructed on Solana, suffered a critical exploit. The hack has resulted in a loss of $5.8 million, which represents 12% of the platform’s total value locked (TVL). The exploit was aimed specifically at RateX-based collateral pricing, one element in Loopscale’s lending ecosystem.
The breach happened less than a year after Loopscale submitted to and passed a full audit this year by blockchain security company OShield. This incident underscores the continuing difficulty in protecting decentralized finance (DeFi) platforms.
The root cause of the exploit has been identified as an isolated issue with Loopscale’s pricing of RateX-based collateral - Loopscale team
Loopscale made its official debut on April 10. It uses an order book model which provides users with greater transparency around their loan terms beforehand. Bridgesplit has $4.25m of venture capital raised in 2021, with backers including Solana Labs and Coinbase Ventures.
In order to prevent further damage from the exploit, Loopscale’s team acted quickly to shut down many of the main functionalities on their platform. The lending platform has since been able to reopen repayments, topups and closing the loop.
"We are fully mobilized to investigate the incident, recover the stolen assets, and protect our community" - Mary Gooneratne
This $5.8 million exploit is the first DeFi hack of 2024 and adds to the count of hacks this year. The sector is now reporting $15 billion in lost revenues. This unfortunate yet prevalent example highlights the need for ongoing security awareness for DeFi platforms.
