On April 26, 2025, Loopscale, a Solana-based DeFi protocol, suspended its lending marketplace operations due to a security breach. Attackers exploited a vulnerability in the on-chain price prediction machine of RateX PT tokens to illegally withdraw approximately $5.8 million in assets, equivalent to 12% of the platform's total locked-in value, by manipulating the collateral valuation mechanism.

The Loopscale team has initiated emergency measures, including suspending new borrowing and withdrawals, while allowing users to make repayments, add collateral and close out positions. The platform is currently undergoing a comprehensive audit and forensic analysis in collaboration with internal and external security experts.

Technical analysis shows that the vulnerability stems from the agreement's single price source and lack of time-weighted average price (TWAP) protection, which allows attackers to create price deviations through flash loans to obtain excess loans. The incident triggered a chain reaction in the Solana ecosystem, including cross-platform margin calls and a decline in market confidence, once again highlighting the need to strengthen the prophetic machine architecture, multi-layer auditing and the importance of chained insurance mechanisms in the DeFi space.

Launched in early April 2025, Loopscale's innovative order book model of matching borrowers and lenders had attracted over 7,000 users and $40 million in deposits. Despite passing security clearance, its fast-track go-live strategy may have compressed stress-testing times, exposing the challenges of balancing security and innovation in the emerging agreement.

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