Loopscale

Loopscale is a modular lending protocol built on Solana that introduces a fundamentally different architecture to DeFi credit markets. Instead of depositing into shared liquidity pools where algorithmic rate curves determine borrowing costs, Loopscale uses an on-chain order book to pair lenders and borrowers directly at terms both parties accept in advance. Every loan is fixed-rate and fixed-duration, meaning neither side faces unexpected rate changes mid-loan.

The protocol went live on April 10, 2025, and positioned itself as infrastructure for what its team calls "Internet Credit Markets" — a vision of on-chain lending capable of handling the full spectrum of Solana assets, from liquid staking tokens to tokenized real-world assets.

How the Order Book Model Works

In Loopscale's model, a lender creates an offer specifying three parameters: which collateral they are willing to accept, what interest rate they require, and the duration of the loan (options include 1 day, 1 week, 1 month, and 3 months). A borrower browsing available offers selects one that fits their needs and opens a loan against it. The rate locked at that moment holds for the full duration of the loan.

This direct-matching approach removes the liquidity pool intermediary that characterizes protocols like Aave or Kamino. In pool-based models, rates fluctuate continuously with utilization, and all depositors share exposure to all borrowers. On Loopscale, each loan is an isolated agreement. A lender who doesn't want to accept memecoin collateral simply doesn't post offers for it. A lender who decides to leave early needs to find another participant to take over their position rather than relying on a shared redemption queue.

The protocol documentation describes this as replacing "algorithmic, market-based rates" with something closer to a traditional credit market: a negotiated term between counterparties, executed and settled on-chain.

Products and Features

Loopscale Vaults are curated pools that sit on top of the order book, automating offer placement on behalf of depositors. Vaults are the primary interface for passive lenders who want yield without actively managing individual loan offers. Different vaults carry different risk profiles depending on the collateral types and counterparties they accept.

Loops let users open leveraged yield positions in a single transaction. A loop borrows against collateral, redeposits the proceeds into a yield-bearing asset, and repeats the cycle to amplify returns — all at a fixed borrowing rate, removing one of the main risks of leveraged farming strategies. Loops 2.0 launched in April 2026 with expanded functionality.

Advanced Lend gives experienced lenders direct access to the order book with full control over collateral preferences, duration, and rate.

Borrow is the borrower-facing interface, allowing users to find available loan offers and draw credit against their assets.

Collateral Coverage

Loopscale's design was intentionally built to support a broader range of Solana asset types than pool-based protocols typically accommodate. The platform accepts SPL tokens, Token-2022 assets, LP positions from Flash.Trade, liquid staking tokens such as JitoSOL and fragSOL, principal tokens from yield-splitting protocols built on RateX, and tokenized real-world assets including ACRED and USDG.

In March 2026, Loopscale added support for concentrated liquidity market maker (CLMM) positions as collateral, extending the protocol's reach to users managing active liquidity on AMMs. ACRED RWA looping with USDG subscriptions launched in January 2026, marking a step toward institutional DeFi use cases.

The modular market structure means collateral risk is isolated. A sharp price decline or oracle failure affecting one collateral type cannot automatically impair loans backed by different assets.

Growth and Metrics

Loopscale launched with $40 million in TVL and more than 7,000 lenders in its first days. By Q3 2025, deposits had grown past $100 million with $38 million actively borrowed across more than 4,000 open loans. Through early 2026, the protocol crossed $1 billion in cumulative borrowing volume.

The platform also powers integrations for other Solana protocols. OnRe, a structured finance project, reported a 15% increase in TVL after integrating with Loopscale in September 2025.

Security: The April 2025 Exploit

On April 26, 2025 — sixteen days after launch — Loopscale suffered a $5.8 million exploit. The vulnerability was tied to how the protocol priced RateX-based collateral: an attacker manipulated collateral pricing to open undercollateralized loans and drain funds. In response, the team halted all lending markets and restricted withdrawals while investigating.

The incident was resolved within 72 hours through a negotiated white-hat bounty arrangement. Following a comprehensive external re-audit of the program library, all functionality — deposits, borrows, and Loops — was restored. Co-founder Mary Gooneratne described the response publicly and committed to a full post-mortem.

Prior to launch, Loopscale had undergone an audit by OShield (January–February 2025) in which critical vulnerabilities were found and addressed. A second audit by Sec3 was still in progress at the time of the incident. The exploit pointed specifically to a pricing edge case in RateX collateral handling not covered by the initial audits rather than the core lending logic.

Team and Funding

Loopscale was founded in 2021 and is based in New York City. The company raised $8.25 million across three funding rounds, with CoinFund as the lead investor in a Series A closed in December 2021. The team numbered ten people as of mid-2026.

Mary Gooneratne serves as Co-Founder and COO. She has been the public face of the protocol through its launch, the security incident, and subsequent growth, and has spoken on the broader vision for on-chain credit infrastructure at industry events including Solana Accelerate 2025.

Token

As of the time of writing, Loopscale has not launched a native token. The protocol runs a points program for early adopters and active users, widely interpreted as a precursor to a token distribution event. Prediction market data from 2026 has placed the probability of a Loopscale token launch by end of year at approximately 62%.

Ecosystem Role

Loopscale occupies a distinct position within Solana DeFi by addressing collateral types and use cases that sit outside the scope of general-purpose lending pools. Its ability to accept LP positions, liquid staking derivatives, yield protocol tokens, and real-world assets in isolated, fixed-rate structures makes it a building block for structured DeFi products — an on-chain credit layer rather than a retail-first yield aggregator. As Solana's asset base continues to diversify, the protocol's modular architecture is designed to accommodate new token primitives without requiring the entire protocol to underwrite unfamiliar risk.