Bitcoin-based decentralized finance platform Solv Protocol has suffered a security exploit resulting in the loss of approximately $2.7 million. The incident, which occurred on Thursday, targeted one of the protocol's structured yield vaults known as Bitcoin Reserve Offerings (BRO), draining roughly 38 Solv Protocol BTC (SolvBTC).
The project confirmed in an X post that fewer than 10 users were impacted by the breach. Solv Protocol has committed to covering the full loss of 38.05 SolvBTC and has implemented measures to prevent the same attack vector from recurring. The team is actively investigating the exploit in collaboration with prominent crypto security firms Hypernative Labs, SlowMist, and CertiK.
While an official post-mortem is pending, independent security researchers have identified the root cause. According to analysis, the attacker exploited a vulnerability—described as either a double-minting flaw or a re-entrancy attack—in one of Solv's smart contracts. This allowed the hacker to excessively mint a token used on the protocol. CD Security co-founder Chris Dior detailed that the vulnerability was triggered 22 times, inflating 135 BRO tokens into approximately 567 million BRO tokens before swapping them for just over 38 SolvBTC.
Pseudonymous researcher "Pyro" characterized the incident as a classic re-entrancy attack, a method where repeated calls to a smart contract manipulate internal accounting before balances update, a technique that has plagued DeFi protocols for years.
In response, Solv Protocol has publicly offered the attacker a 10% bounty in exchange for returning the stolen funds. The project shared an Ethereum wallet address to facilitate the return, but as of the latest updates, the hacker has not yet sent an on-chain message to that address, according to Etherscan data.
Solv Protocol is a significant player in Bitcoin DeFi, operating a Staking Abstraction Layer that allows users to deposit Bitcoin to mint SolvBTC, which can then be used for lending, borrowing, or staking across other blockchains. The protocol currently holds 24,226 Bitcoin (worth over $1.7 billion), claiming the title of the largest on-chain Bitcoin reserve.
