Loopscale Recovers $2.8M After DeFi Exploit

Loopscale Recovers $2.8M After DeFi Exploit

Decentralized finance (DeFi) protocol Loopscale has successfully recovered approximately $2.8 million following a significant exploit over the weekend. This represents nearly half of the funds initially stolen, and the recovery is a result of ongoing negotiations with the attacker.

In an update posted to X (formerly Twitter), Loopscale confirmed the return of roughly 19,463 Wrapped SOL (WSOL). The funds were returned in stages, with the largest single return being 10,000 WSOL (approximately $1.48 million).

Bounty and Negotiations

Loopscale initially offered the attacker a 10% bounty and immunity from legal action in exchange for the return of 90% of the stolen funds. This proactive approach appears to have been successful in facilitating negotiations and securing the return of a substantial portion of the stolen assets.

The team emphasized their commitment to an amicable resolution, stating that their pursuit of this resolution continues to make progress. The swift action in offering a bounty and engaging in direct negotiations stands in contrast to the typical response to DeFi exploits.

The Exploit

The exploit, which occurred on April 26th, involved manipulation of Loopscale's RateX PT token pricing functions. This resulted in the theft of approximately $5.7 million in USDC and SOL from the platform's vaults. Importantly, only vault depositors were impacted; borrowers and loopers were unaffected.

Recent Trends in DeFi Security

While recovery of stolen funds is not always common in the DeFi space, recent events suggest a growing trend of successful negotiations and the return of stolen assets. This positive development showcases the potential for collaborative problem-solving within the industry. Another example of successful fund recovery is Term Finance, which recovered $1 million out of $1.6 million lost due to an oracle error.

Note: Codeum provides comprehensive blockchain security solutions, including smart contract audits, KYC verification, and custom smart contract and DApp development. We also offer tokenomics and security consultations and have strategic partnerships with launchpads and crypto agencies to help secure your project.