Loopscale is a modular lending protocol on Solana that uses an order book architecture to directly match lenders and borrowers at fixed rates and terms. Launched on April 10, 2025, the protocol reached over $100 million in deposits and $38 million actively borrowed by Q3 2025, with more than 4,000 active loans. Founded by Mary Gooneratne and formerly known as Bridgesplit, Loopscale raised $4.25 million in 2021 from CoinFund, Jump Capital, Coinbase Ventures, Solana Ventures, and Room40.
Unlike pool-based protocols like Aave or Solend that aggregate liquidity into shared reserves with variable rates determined by utilization, Loopscale enables lenders to create customized lending offers specifying eligible collateral, interest rates, loan durations, and LTV ratios. This direct matching eliminates the interest rate spread between what borrowers pay and lenders earn, improving capital efficiency while isolating risk per market to prevent contagion across the protocol.
The protocol processes over $1 billion in cumulative borrowing volume as of Q4 2025, supporting more than 40 token pairs including liquid staked tokens, LP positions, principal tokens from Exponent and RateX, tokenized real-world assets, and yield-bearing tokens. Loopscale experienced a $5.8 million exploit on April 26, 2025 affecting USDC and SOL vault depositors, but successfully negotiated a 90% recovery of stolen funds through a white hat bounty agreement with the attacker.
What are Loopscale's main features and how do they work?
Order Book Matching with Fixed Rates: Loopscale's core innovation replaces pooled liquidity with an on-chain order book where lenders create limit orders specifying collateral types, rates, and durations. Borrowers then match against the best available offers, with both parties locked into fixed rates for the loan duration (1 day, 1 week, 1 month, or 3 months). This eliminates rate volatility since lend rate equals borrow rate exactly, with no spread dilution from idle capital earning lower returns.
Loopscale Vaults for Passive Lending: Curated vaults managed by third-party experts allow passive lenders to deposit assets that are automatically deployed across multiple markets according to the curator's strategy. The SOL GENESIS Vault consistently yields 10%+ APR as of Q4 2025, driven by high borrowing demand for LST Loops plus additional rewards from LST partners. Each vault has a single loan asset but can lend to multiple collateral types with different risk profiles.
Yield Loops for Leveraged Returns: One-click leverage strategies let users multiply returns on yield-bearing assets through automated flash loan execution. For example, a JupSOL Loop borrows SOL via flash loan, swaps for additional JupSOL, deposits as collateral, borrows more SOL against it, and repays the flash loan—all in one transaction. Users can leverage up to 4x with fixed borrowing costs locked for up to 3 months, protecting against rate spikes that could turn positions negative.
Modular Isolated Markets: Each lending market operates independently with its own collateral type, risk parameters, and pricing. This isolation prevents systemic risk where problems with one asset affect the entire protocol. Lenders can define exact risk preferences per asset rather than sharing pooled exposure, while borrowers access higher LTVs since markets aren't constrained by the riskiest asset in a pool.
Advanced Lend Positions: Sophisticated lenders can place customizable limit orders defining eligible collateral, minimum APRs, and acceptable loan durations. These orders are virtualized across all matching order books, maximizing capital deployment while maintaining precise risk control. Lenders can withdraw unused liquidity anytime or sell active loans early on the order book to exit positions before maturity.
Automatic Refinancing: Fixed-term loans automatically roll over at current market rates when they expire if auto-refinancing is enabled. This provides borrowing continuity without manual intervention while ensuring loans stay market-priced. If refinancing isn't possible due to no matching lenders, a 2-day grace period is provided before liquidation begins.
Idle Capital Optimization: Unutilized lending capital waiting for borrower matches is automatically deployed to external protocols like MarginFi to earn competitive yields until matched. This reduces opportunity cost of idle liquidity while maintaining instant availability when borrowers need capital.
Support for Novel Asset Types: Loopscale's flexible architecture supports any Solana token primitive including SPL tokens, Token-2022 assets, LP positions from Flash.Trade, staked tokens like JitoSOL and fragSOL, principal tokens from yield-splitting protocols, and tokenized real-world assets like OnRe's ONyc reinsurance tokens. The protocol can integrate new assets without governance approval or minimum liquidity thresholds.
How does Loopscale compare to Aave and traditional pool-based lending?
Loopscale fundamentally differs from Aave through its order book architecture versus Aave's pooled liquidity model. In Aave, all lenders deposit into shared reserve pools where rates fluctuate based on utilization, creating unpredictable borrowing costs and interest rate spreads that dilute lender returns. When 80% of a pool is borrowed, lenders earn on 100% of their capital but only receive interest from the 80% actually utilized, meaning borrow APR exceeds lend APY.
On Loopscale, direct matching means lenders only deploy capital when actually borrowed, eliminating idle capital dilution. If a borrower pays 8% APR, the lender earns exactly 8% APY on matched funds. This precise rate alignment typically results in higher yields for lenders and lower costs for borrowers compared to pool models at similar market rates.
Risk management also differs significantly. Aave pools share systemic risk where adding volatile collateral affects all lenders in that pool, requiring conservative parameters that constrain high-quality borrowers. Loopscale's isolated markets let lenders define risk per asset—you can lend USDC against SOL at 75% LTV and 10% APR while separately lending against memecoin collateral at 50% LTV and 25% APR. Each market's risk stays segregated.
Rate predictability favors Loopscale for borrowers seeking cost certainty. Aave's variable rates can spike dramatically during high utilization periods, potentially liquidating leveraged positions. Loopscale's fixed-rate loans lock borrowing costs for the full term, making leverage strategies more predictable and safer for yield farming applications.
However, Aave offers advantages in liquidity depth with over $12 billion TVL across 8 chains versus Loopscale's $100 million on Solana only as of Q4 2025. Aave supports instant borrowing and repayment anytime, while Loopscale loans have fixed terms requiring either refinancing or order book selling for early exit. Aave also has longer operational history since 2020 with more extensive audits and battle-testing.
How does Loopscale's order book lending process work?
The lending process begins when lenders create offers by depositing assets and defining parameters: eligible collateral types, minimum APR, maximum LTV ratio, and loan duration. These offers sit on the order book as limit orders, visible to all potential borrowers seeking that debt asset. Lenders using Loopscale Vaults delegate these decisions to vault curators who manage strategy and capital allocation.
Borrowers interact with the order book by selecting collateral to deposit and debt asset to borrow. The matching engine automatically pairs them with the best available lender offers meeting their collateral type at the lowest APR. The loan executes atomically—collateral locks in an escrow account, borrowed funds transfer to the borrower, and both parties enter a fixed-rate agreement for the specified duration.
During the loan term, borrowers pay accrued interest calculated daily but settled at maturity or repayment. Health factors are monitored continuously using Pyth oracles for standard tokens and protocol-native price feeds for complex assets like principal tokens. If collateral value declines such that LTV exceeds the liquidation threshold, the position becomes eligible for liquidation.
At loan maturity, if auto-refinancing is enabled, the protocol automatically matches the borrower with current market rate offers for rollover. If disabled or no matching lenders exist, the borrower must repay within a 2-day grace period or face liquidation. Lenders can exit before maturity by selling their loan position on the order book at fair value accounting for accrued interest and remaining term.
The technical implementation leverages Solana's 65,000 TPS capacity for near-instant matching at sub-cent transaction fees. Smart contracts written in Rust handle order book logic, collateral management, interest calculation, and liquidation mechanics. Each position creates a new Solana account requiring rent deposit (approximately 0.002-0.005 SOL) that's fully refundable when closing the position.
What chains and networks does Loopscale support?
Loopscale operates exclusively on Solana as of Q4 2025, with no announced plans for other blockchain deployments. The protocol is purpose-built for Solana's architecture, leveraging its high throughput, low latency, and sub-cent transaction fees to enable efficient order book matching that would be cost-prohibitive on chains like Ethereum mainnet.
The Solana-native design allows Loopscale to support any token primitive on the network including SPL tokens, Token-2022 standard assets, LP tokens from Orca and Raydium, staked tokens from Jito and Marinade, principal tokens from Exponent and RateX, and emerging token standards. This universal compatibility positions Loopscale to capture lending demand as new asset types launch on Solana.
Integration with Solana DeFi ecosystem protocols enhances functionality—idle lending capital routes to MarginFi for yield optimization, liquidations can utilize Jupiter aggregator for optimal execution, and oracle data comes from Pyth Network with protocol-specific feeds for complex assets. These composability advantages stem from being deeply embedded in Solana's infrastructure.
What are Loopscale's fees and actual borrowing costs?
Loopscale operates with transparent market-based rates determined by supply and demand in the order book rather than algorithmic curves. Borrowing APRs vary by collateral type, loan duration, and current market conditions. As of Q4 2025, typical rates include SOL-collateralized loans at 8-12% APR, stablecoin-collateralized borrows at 5-8% APR, and higher-risk collateral like memecoins at 15-25% APR.
Platform fees are minimal compared to traditional DeFi protocols. Loopscale charges no spread between borrow and lend rates—if you borrow at 10% APR, your lender earns exactly 10% APY on that matched capital. The protocol earns revenue through small origination fees and performance fees on vault strategies, typically 0.1-0.5% of transaction value.
Network gas fees on Solana remain negligible, usually 0.00001-0.0001 SOL per transaction (less than $0.01 at current prices). Opening a new lending or borrowing position requires a Solana account rent deposit of approximately 0.002-0.005 SOL ($0.50-$1.25), which is fully refundable when closing the position. This makes Loopscale dramatically cheaper to use than Ethereum-based lending protocols where gas fees can reach $10-50 per transaction.
For concrete cost examples, borrowing $1,000 worth of USDC against SOL collateral at 10% APR for 30 days costs approximately $8.33 in interest plus less than $0.01 in gas fees. The same transaction on Aave V3 Ethereum might cost similar interest but $15-30 in gas fees just to execute. Early loan exit by selling on the order book incurs fair value adjustment based on remaining interest and current rates.
Yield Loops include flash loan fees in their total cost, but these are incorporated into the displayed leveraged APY. A 3x JitoSOL Loop showing 15% APY already accounts for borrowing costs and flash loan fees, representing net return to the user.
Has Loopscale been audited and is it secure?
Loopscale underwent initial security audits before launching in April 2025, with critical and high-risk issues identified and fixed according to official documentation. The protocol completed an additional audit with Adevar Labs in Q3 2025, demonstrating commitment to progressive feature-specific audits before program updates. However, specific audit reports and auditor names beyond Adevar are not publicly disclosed in available documentation.
The protocol experienced a significant $5.8 million exploit on April 26, 2025, just 16 days after public launch. The attack manipulated pricing oracles for RateX principal tokens, enabling undercollateralized loans that drained approximately 12% of the protocol's $40 million TVL at the time. Only USDC and SOL vault depositors were affected, with other assets remaining secure throughout the incident.
In a relatively positive outcome, Loopscale successfully negotiated with the exploiter to return 90% of stolen funds in exchange for a 10% white hat bounty (approximately $580,000) and immunity from legal action. The agreement was reached within 48 hours, with funds returned by April 28, 2025. The team immediately halted all platform operations, restricted withdrawals, and worked with three independent security firms to audit remediation efforts before resuming services.
Security measures include isolated collateral per loan preventing contagion between markets, multi-oracle pricing using Pyth as primary source with protocol-native feeds for complex assets, partial liquidations that only seize minimum collateral needed to restore health factor, and price smoothing mechanisms to prevent manipulation. However, the April exploit demonstrates that oracle integration points remain vulnerable attack vectors.
Current security status as of Q4 2025 shows the protocol has resumed normal operations with enhanced oracle validation and risk parameters. The team emphasizes ongoing security vigilance through continuous audits, bug bounty programs, and conservative feature rollout. Users should understand that DeFi lending protocols carry smart contract risk, oracle manipulation risk, and liquidation risk regardless of audit status.
Who should use Loopscale and what are the best use cases?
Yield-Seeking Lenders on Solana: Users with SOL, USDC, or other Solana assets seeking passive yields of 8-12% APR should consider Loopscale Vaults, particularly the SOL GENESIS Vault which consistently delivers 10%+ returns as of Q4 2025. The order book model typically offers higher yields than pool-based protocols since there's no idle capital diluting returns, making it attractive for stablecoin holders comfortable with Solana DeFi exposure.
Leveraged Yield Farmers: Traders wanting to amplify returns on staked tokens like JitoSOL, JupSOL, or mSOL benefit from Yield Loops offering 1-4x leverage with fixed borrowing costs. The one-click execution and rate predictability make this ideal for users who understand leverage mechanics but want simplified execution. For example, someone earning 7% on JitoSOL can potentially achieve 15-20% APY at 3x leverage with fixed costs locked for 3 months.
Borrowers Needing Rate Certainty: Users requiring liquidity against volatile collateral who want predictable borrowing costs should use Loopscale over variable-rate protocols. Fixed rates protect against utilization spikes that can suddenly increase borrowing costs on Aave or Solend. This is particularly valuable for leveraged positions or business operations requiring cost certainty for planning purposes.
Holders of Long-Tail Assets: Users with LP tokens, staked assets, or emerging Solana primitives as collateral can access lending markets on Loopscale that don't exist on other protocols. The modular market structure enables lending against assets like Flash.Trade FLP tokens, Fragmetric's fragBTC, or OnRe's ONyc reinsurance tokens—collateral types unsupported by major pool-based lenders.
Sophisticated Lenders Managing Risk: Advanced users wanting granular control over collateral exposure, rates, and loan terms should use Advanced Lend positions. This allows creating custom lending strategies like only accepting blue-chip LST collateral at 75% LTV and 8% APR while separately lending to higher-risk assets at 50% LTV and 20% APR—impossible with pooled lending models.
Users Avoiding Ethereum Gas Fees: Anyone deterred by $15-50 transaction costs on Ethereum DeFi can execute identical lending, borrowing, and leverage strategies on Loopscale for less than $0.01 in gas fees. The Solana infrastructure makes frequent position adjustments and smaller transaction sizes economically viable.
What are the risks of using Loopscale?
Smart Contract and Oracle Risk: The April 2025 exploit that drained $5.8 million demonstrated real vulnerabilities in oracle integration and collateral pricing mechanisms. While 90% of funds were recovered, the incident occurred just 16 days after launch, suggesting potential undiscovered vulnerabilities in the relatively new codebase. Users should understand that complex order book matching logic and multi-oracle price feeds create attack surfaces that may not be fully stress-tested.
Liquidation Risk for Borrowers: Fixed-rate loans don't eliminate liquidation risk from collateral price declines. If your SOL collateral drops 30% while borrowing USDC at 75% LTV, you'll face liquidation regardless of your fixed borrowing rate. Liquidations seize only minimum collateral needed to restore health factor, but rapid price movements or oracle delays can result in larger-than-expected losses. The 2-day grace period for expired loans provides some buffer but isn't guaranteed.
Market Liquidity Risk: With $100 million TVL versus Aave's $12 billion, Loopscale offers significantly less liquidity depth. Large borrows may not find matching lenders at desired rates, and early loan exits require finding buyers on the order book at fair value. During market stress, order book depth can evaporate quickly, preventing refinancing at maturity or forcing acceptance of unfavorable rates.
Platform-Specific Risks: The order book model means your loan may not refinance if no lenders match at maturity, triggering the 2-day grace period before liquidation. Vault strategies depend on curator decisions that may underperform or increase risk exposure without direct user control. Fixed terms create opportunity cost if market rates drop significantly after locking in higher rates.
Solana Network Risk: Being Solana-exclusive exposes users to chain-specific risks including network outages that have historically occurred during high congestion, potential validator issues, or ecosystem-wide concerns. Users cannot diversify across multiple chains like with Aave's multi-chain deployment.
Limited Operating History: Launching in April 2025, Loopscale has less than one year of operational track record compared to Aave's four-plus years. The early exploit, while resolved, demonstrates security processes are still maturing. Long-term protocol sustainability, governance structures, and economic model viability remain unproven through full market cycles.
