Loopscale Suffers $5.8 Million Loss in DeFi Breach

Loopscale, a decentralized finance (DeFi) protocol built on the Solana blockchain, suffered a significant security breach on Saturday, resulting in a loss of over $5.8 million. The exploit was traced back to a vulnerability in the pricing of RateX-based collateral. The Loopscale team has initiated an investigation to uncover the specifics of the breach and identify those responsible.

Loopscale, originally known as Bridgesplit, launched its order book-based lending platform on April 10. The protocol aimed to offer more predictable loan terms compared to traditional pool-based platforms like Aave and Solend. With backing from high-profile investors such as Solana Labs and Coinbase Ventures, Loopscale's mission was to enhance the crypto market by providing a more stable and reliable decentralized lending experience. Despite its promising launch and strong support, the platform found itself in the midst of a high-profile breach, raising questions about the security of even the most well-funded DeFi platforms.

In response to the exploit, Loopscale took immediate action to mitigate further risks by restricting certain platform features. By the evening, key services such as loan repayments and position top-ups were re-enabled as part of the recovery process. Co-founder Mary Gooneratne confirmed via X that the team was fully mobilized to investigate the breach and secure user assets. The team is also working to recover the lost funds.

Interestingly, Loopscale’s security had been audited earlier in the year by OShield, which identified some critical vulnerabilities. Although the protocol claimed that all high-risk issues were addressed, a second audit by Sec3 is still in progress. This incident underscores the growing concerns about security within the DeFi space, even for platforms that undergo multiple security audits.

The breach of Loopscale is part of a series of security issues in the crypto space in 2025. Earlier in the year, Bybit was hacked for $1.46 billion, and KiloEX and Infini also lost millions. These incidents highlight the ongoing concerns over vulnerabilities in decentralized finance, as well as the importance of preparedness via audit and security protocols.

As the Solana price continues to experience upward movements and grab the attention of investors, incidents such as the Loopscale breach demonstrate that every kind of project, including those built on properly constructed blockchain projects like Solana, can be open to exposure and attack. This presents a serious critical risk for the crypto space and stresses the urgent need for the supply and security of ongoing assets to maintain the longevity of decentralized finance platforms that emerge.

Although the Solana price rally may be drawing more investor interest in Solana-based projects, Loopscale’s misstep is a stark reminder of the risks in the space. While there is an ongoing investigation and recovery efforts, users and investors will be watching closely for Loopscale’s next steps. The incident underscores the growing need for better security protocols across DeFi platforms and leaves the crypto market wondering whether Loopscale can recover and secure its place. How Loopscale responds in the wake of these events could serve as a precedent for other DeFi projects going forward.

Loopscale’s $5.8 million loss is a clear indication of the risks associated with DeFi platforms, even with proper audit reviews. Users and investors must be vigilant to determine how Loopscale will recover after the investigations and how it will safeguard its platform’s future. Security experts continue to stress the need for better security provisions across the decentralized finance space to avoid the risks of bad actors taking advantage of vulnerabilities in the future.