Loopscale, a Solana-based lending protocol had a recent security exploit. This unfortunate event resulted in a loss of $5.8 million, representing 12% of its total value locked (TVL). The platform, formerly known as Bridgesplit, officially went live on April 10. Unfortunately, it then became the target of a very sophisticated hack focused on its RateX-based collateral pricing mechanism.
That exploit highlights the ongoing vulnerabilities in the decentralized finance (DeFi) space. This extends to any platform, even ones that have already been independently security audited. Loopscale had recently been audited by blockchain security firm OShield. Despite all this, the platform was still caught off guard and fell susceptible to attack.
As a direct consequence of the incident, Loopscale took the precautionary measure of shutting down some of the most critical operations on its platform to prevent further harm. The platform quickly restored the ability to make loan repayments, top up loans, and close loops.
"The root cause of the exploit has been identified as an isolated issue with Loopscale’s pricing of RateX-based collateral." - Loopscale team
The hack adds to the growing list of DeFi exploits in 2024. The sector is already reeling from stunning losses, in the hundreds of millions of dollars. This case exemplifies a more worrisome trend that proves even recently deployed, well-audited DeFi platforms are not immune to attack vectors.
Loopscale, then known as Bridgesplit, raised $4.25 million in venture capital in early 2021. Most notably, it has already managed to attract support from Solana Labs and Coinbase Ventures. The exploit is a blow to the platform’s reputation.
Loopscale, which raised $4.25 million in venture capital during 2021 as Bridgesplit, counts Solana Labs and Coinbase Ventures among its backers. The exploit represents a setback for the platform.
