Edel Finance Pauses Lending After DeFi Exploit Inflates Tokenized Google Stock by 7,700%

The exploit inflated the token's collateral value by 7,700% and allowed the attacker to borrow against it, leaving the protocol with $403,000 in bad debt. Edel Finance took to X to tell depositors it will absorb the debt in full, restoring depositor balances one-to-one.

Edel said it detected and contained the exploit the same day, pausing all version-one contracts and warning users not to interact with them. A version two of the protocol with a redesigned oracle architecture is being deployed to close off this type of manipulation. 

Containment and restoration

According to the company's post on X, the attack targeted wGOOGLx, a wrapped version of GOOGLx, the tokenized Alphabet stock issued on xStocks. The wrapper around a stock is necessary for it to interact with specific protocols, and is supposed to follow the price of the underlying asset. 

Using a "flash-loan-assisted exchange rate" as per Blockaid’s automatic alert system, the attacker interfered with the conversion rate between the tokenized stock and its wrapper, so wGOOGLx showed a price 78x the value of the underlying stock. The Chainlink oracle used by Edel to track the price of the underlying stock reportedly remained correct throughout. 

According to the post, the team has traced the attacker's transactions and is coordinating with exchanges. It has also extended a whitehat settlement offer, giving the responsible party a defined window to return the funds in exchange for a bounty. 

The company said in the X post that its "immediate priorities are containment, user restoration, and transparent follow-up." 

In an email to Sandmark, co-founder and CEO Andrés Soltermann, wrote: "We take full responsibility for it and are in the process of fully refunding all affected users."

Growing attack surface

Even though the exploit was identified and halted quickly, its positioning within tokenized stocks casts a shadow on a rapidly expanding market. Onchain tokenized equities have grown to roughly $1.1bn in market value by mid-2026, up nearly 2,878% year on year according to RWA.xyz. Citi predicts that the sector will be worth between $5.5-$8tn by 2030. 

The interaction mechanism of a wrapper used by Edel is often used to allow tokenized assets to interact with DeFi protocols. Research from the OWASP Foundation, a cybersecurity watchdog, found that price manipulation using flash loans ranked as the second most common smart contract vulnerability in 2025. 

Edel has said it will issue a full post-mortem of the incident, highlighting points of vulnerability that other security teams can learn from.  "We're working with xStocks to make sure this can never happen again," Soltermann said in the email.