Loopscale: Pricing Misconfig and NAV Loan Exploit

Loopscale, a Solana order-book lending protocol, halted its operations after a week-long campaign of malicious API traffic. The company disclosed two paths that led to the pause: a SOL Genesis Vault pricing misconfiguration and a USDC Genesis Vault NAV inflation attempt.

Path 1:

A misconfigured combination of asset-pricing parameters in the SOL Genesis Vault led to an undercollateralized loan of approximately $412K. The attacker exploited the misconfiguration by valuing collateral in the vault as a different asset. This resulted in a loan being sized off of incorrect price data, leaving the vault undercollateralized. The protocol halted the transaction after detecting the misconfiguration.

Path 2:

The second path attempted an atomic transaction bundle sale into the USDC Genesis Vault. The attacker sold a loan carrying an extreme interest rate, which inflated the vault's Net Asset Value (NAV). This inflated NAV enabled a disproportionate redemption of approximately $521K. However, Loopscale's systems halted the redemption within 30 seconds, preventing any permanent loss to users.

The total economic exposure from these paths was roughly $412K of undercollateralized borrowing and a $521K attempted redemption that was stopped. Loopscale stated that affected vaults have been made whole, and no user deposits have incurred a loss. The restoration of priority lending, collateral top-ups, and repayments was completed, except for USDC Genesis Vault-funded loans. Vault withdrawals are still restricted.