Loopscale, a decentralized finance protocol based on Solana, faced a significant security breach resulting in a loss of $5.8 million, just two weeks after its official launch.
Breach at Loopscale
Loopscale faced substantial losses of $5.8 million due to a security breach affecting USDC and SOL funds. The platform, previously known as Bridgesplit, launched only two weeks prior. The exploit was linked to Loopscale's pricing mechanism. Co-founder Mary Gooneratne stated that the team is mobilized to investigate the incident and recover funds.
TVL Drop Post-Incident
The incident resulted in a significant drop in Loopscale's total value locked (TVL), losing approximately 12%. However, the firm managed to restore some functions, such as loan repayments, although withdrawals remain restricted. Analysts highlight potential implications for user trust and market dynamics, particularly due to Solana's prior challenges with breaches.
Issues with Unique Pricing Model
This incident illustrates the risks associated with new pricing approaches. The Solana DeFi ecosystem has previously encountered breaches, but Loopscale's issues are attributed to its unique collateral pricing model. Historical data shows that $1.6 billion in hacks were reported in Q1 2025, predominantly on centralized platforms. Security experts believe that ongoing audits can strengthen system defenses.
The situation with Loopscale underscores the need for continuous audits and robust security protocols in the DeFi space, especially for new projects. Over time, this event may influence the platform's stability and user trust.
