Gate News message, April 26 — Scallop Protocol, a lending platform on the Sui blockchain, suffered a flash loan exploit targeting a deprecated side contract linked to its sSUI rewards pool, resulting in a loss of approximately $142,000 (150,000 SUI). The attack exploited oracle price feed manipulation to artificially depress SUI/USDC exchange rates and borrow assets at distorted prices, with the attacker repaying the flash loan within the same transaction and pocketing the difference.
The core issue stemmed from a deprecated V2 contract deployed in November 2023 that remained callable on-chain. In this outdated contract, a critical variable called “last_index” was never initialized when new accounts were created. This flaw allowed the attacker to claim rewards as if they had been staking since the pool’s inception. With the reward index having grown to 1.19 billion over 20 months, the attacker staked 136,000 sSUI but received credit for 162 trillion points. Since the rewards pool operated at a 1:1 exchange rate, these points converted directly to 162,000 SUI worth of rewards. The pool contained only 150,000 SUI, and all funds were drained. On-chain data shows the stolen funds were quickly routed through a mixing service, complicating recovery efforts.
Scallop’s team responded by temporarily pausing operations before unfreezing core contracts and resuming all operations. The protocol confirmed that the exploit was isolated to the deprecated rewards contract and did not affect the core protocol or user deposits, with all funds remaining safe. The attacker subsequently contacted the team offering to return 80% of the stolen funds in exchange for a white-hat bounty, and the incident is now under investigation. The team will review how the flaw escaped detection during prior audits by firms including OtherSec and MoveBit.
SUI price remained resilient following the exploit, rising approximately 2% in the 24 hours following the attack and trading at $0.94 with a daily trading volume of around $187 million. The incident reflects a broader trend in April 2026, where major DeFi exploits have targeted deprecated contracts and infrastructure layers rather than core protocol logic, with cumulative losses exceeding $600 million across 12 major incidents during the month.
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