How Does Loopscale Work?
A Solana lending protocol that matches lenders and borrowers through an order book and accepts exotic collateral types like Pendle yield tokens. It holds $91M in deposits. Its C- grade reflects a confirmed $5.8M exploit in April 2025 where attackers manipulated the price of exotic collateral to steal funds, plus thin documentation. The exploit funds were fully recovered, which moderates the track record penalty.
TVL
$86M
Sector
Lending
Risk Grade
C
Value Grade
D-
Core Mechanisms
Lending/Credit-Orderbook
NovelCredit order book for peer-to-peer lending
Order book-based lending matching instead of pooled liquidity; novel approach to credit markets with limited documentation.
Oracle/Exotic-Collateral
NovelCustom pricing for exotic collateral types (PT tokens, LSTs)
Prices exotic collateral including Pendle PT tokens; confirmed $5.8M exploit via RateX PT price feed manipulation in April 2025.
Lending/Pool
Lending pool for standard collateral
Standard lending pool alongside the credit order book for more liquid collateral types.
How the Pieces Interact
Single-point price feeds for exotic collateral (PT tokens) enable oracle manipulation to extract funds from lending positions, as confirmed by the $5.8M exploit.
Credit order book relies on accurate collateral valuation; exotic collateral mispricing cascades through matched orders, affecting both lenders and borrowers.
What Could Go Wrong
- Confirmed $5.8M oracle exploit via RateX PT pricing
- Exotic collateral pricing introduces oracle surface area
Exotic Collateral Oracle Exploitation
ModerateTrigger: Attacker identifies a second manipulable price feed for exotic collateral (PT tokens, LSTs) and executes a flash-loan-assisted oracle manipulation exceeding $10M
- 1.Attacker identifies a thinly-traded exotic collateral type with a single-source price feed on Loopscale — Flash loan used to temporarily inflate the collateral's oracle price
- 2.Inflated collateral value allows borrowing far beyond true collateral worth — Attacker borrows maximum amount against manipulated collateral valuation
- 3.Flash loan repaid; collateral price reverts to true value — Borrowed funds extracted; lending pool left with undercollateralized positions
- 4.Lenders in credit order book discover losses; confidence collapses — Mass withdrawal from all Loopscale pools including those with non-exploited collateral
- 5.Protocol reputation damage from second exploit compounds first $5.8M loss — TVL drops to near-zero as lenders flee to established lending protocols
Risk Profile at a Glance
Overall: C (48/100)
Lower score = safer